London — European stocks stumbled and the dollar dropped to three-month lows on Monday as hopes waned for progress in Sino-US trade talks at this week’s G20 meeting and fears grew of a confrontation with Iran.

Investors are waiting to see if Presidents Donald Trump and Xi Jinping can de-escalate a trade war that is damaging the global economy and souring business confidence. The leaders will meet during a G20 summit in Japan...

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