Oil prices fell yesterday after a surprise build in US crude inventories, while the dollar gave up recent gains as investors awaited direction on a potential interest rate hike.

Wall Street weakened in morning trading after oil turned lower, as energy shares dropped, with stocks losing steam after the Nasdaq and S&P 500 set record highs on Tuesday.

The Dow Jones industrial average fell 40.95 points, or 0.22 per cent, to 18,492.1, the S&P 500 lost 6.5 points, or 0.3 per cent, to 2,175.24 and the Nasdaq Composite dropped 26.05 points, or 0.5 per cent, to 5,199.43.

“Low volume is fairly standard at this time of the year and August tends to be a very choppy month,” said Quincy Krosby, market strategist at Prudential Financial in Newark, New Jersey. “If you have low volumes, it could skew the market in any direction, and that’s what you have today.”

With bond yields low in developed economies as central banks maintain accommodative monetary policies, investors have sought equities for yield.

MSCI’s all-world index slipped 0.1 per cent after rising to a fresh one-year high. MSCI’s emerging markets index gained 0.4 per cent, up for a fifth straight session and hitting its highest in a year.

“For the most part international markets are continuing to outperform the US in recent days... particularly the emerging markets,” said Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis.

The pan-European FTSEurofirst 300 index slipped 0.3 per cent after five days of gains. Germany’s DAX shed 0.4 per cent, after hitting a 2016 high a day earlier, as utility E.ON tumbled after posting a net loss.

Oil prices fell after the second-biggest weekly draw in US gasoline this summer was countered by an unseasonable growth in crude stockpiles.