Stocks on major world markets dipped yesterday in the wake of consecutive sessions of record highs, as investors looked for clarity on US President Donald Trump’s tax and trade policies.
Despite the decline, the MSCI All-Country World index remained on track for its fourth straight week of gains after rising to a record high on Thursday.
Wall Street was lower for a second straight day as softness in financial stocks, down 0.5 per cent, weighed on equities. Banks had provided a boost earlier in the week when US Federal Reserve Chair Janet Yellen gave testimony that appeared to open the door for a rate hike in March.
Markets have also been underpinned by expectations of concrete fiscal plans from the Trump administration, which vowed last week to announce a tax reform plan in the coming weeks.
“The market seems to be extremely generous to the Trump organisation and I guess the market is focused on the long term of what might be versus what is happening right now,” said Randy Frederick, managing director of trading and derivatives for Charles Schwab in Austin, Texas.
“At some point the market is going to expect the things that it is moving higher on to actually happen.”
The Dow Jones Industrial Average fell 62.21 points, or 0.3 per cent, to 20,557.56, the S&P 500 lost 5.75 points, or 0.24 per cent, to 2,341.47 and the Nasdaq Composite dropped 2.96 points, or 0.05 per cent, to 5,811.94.
US markets will be closed on Monday for the Presidents Day holiday.
European stocks edged lower as gains in Allianz and Unilever offset a decline in banking and mining stocks.
MSCI’s benchmark global equity index lost 0.4 per cent to 442.76 points, retreating from a record high of 444.94 on Thursday. Europe’s index of leading 300 stocks was 0.09 per cent lower.
The dollar, up 0.4 per cent, improved versus most peers with the exception of the yen, leaving it little changed on the week following a mildly hawkish view from Federal Reserve Chair Janet Yellen and surprising strong US data on retail sales and consumer prices.
The yen rose against major currencies as concerns about the upcoming French elections and the lack of movement in fiscal changes in the United States kindled safe-haven demand for the Japanese currency.
Oil slipped, pressured by growing global stocks, while expectations that an oil output cut by producers might balance the market helped to underpin prices.
Brent crude lost 0.3 per cent to $55.46 while US crude declined 0.5 per cent to $53.07 a barrel.