US dollar recovered some ground yesterday while stocks posted modest losses, with investors still voicing caution over how US policy will develop under Donald Trump’s Presidency days ahead of his inauguration.

Energy stocks fell along with oil futures and US Treasury yields rose on higher inflation ahead of a speech by US Federal Reserve chair Janet Yellen.

While Wall Street has been betting on Trump’s promises of lower taxes, lighter regulation and fiscal spending, some investors hit the pause button before he officially takes office on Friday as he has yet to unveil clear policy plans.

“There is a lot of uncertainty hovering over the market, regarding what policies will be implemented,” said Quincy Krosby, market strategist at Prudential Financial.

Dow Jones Industrial Average was down 24.29 points, or 0.12 per cent, to 19,802.48, the S&P 500 had lost 0.67 points, or 0.029543 per cent, to 2,267.22 and the Nasdaq Composite had added 1.99 points, or 0.04 per cent, to 5,540.71.

Europe’s FTSEurofirst 300 index of major companies was flat after a choppy session, while banking shares came under pressure as investors chewed over details of regulatory fines on Deutsche Bank.

Investors were also waiting for more fourth-quarter earnings reports before making more bets according to Andy Sullivan, portfolio manager with GL Asset Management UK in London.  “The last few days have been choppier, and for the rally to be sustained, we need to see earnings growth start to come through,” Sullivan said.

The dollar was up 0.3 per cent against a basket of major currencies after hitting a nearly six-week low the previous day after Trump complained that dollar strength as hurting trade relations with China.