Broad equity market declines in Asia and Europe and a lower open on Wall Street threatened to spoil the longest winning streak for MSCI’s global stock index since 2003.
Japan’s Nikkei index saw a wild two per cent swing after hitting its highest since 1992 and Europe’s main indexes were firmly in the red as tech and commodity stocks tumbled and as Brexit talks resumed amid low expectations in Brussels.
Germany’s 10-year bond yield edged up for the first time in more than a week and the euro and pound were both higher as the long-running saga of US tax reforms weighed on the dollar.
In the US, technology stocks dragged down indexes amid skepticism over a Republican tax overhaul plan.
The Dow Jones Industrial Average fell 77.61 points, or 0.33 per cent, to 23,485.75, the S&P 500 lost 11.03 points, or 0.43 per cent, to 2,583.35 and the Nasdaq Composite dropped 52.50 points, or 0.77 per cent, to 6,736.62.
MSCI’s all-country equity index is clocking year-to-date gains of almost 19 per cent. But as a measure of relative calm amid the current bull market and a reflection of the low volatility environment that has dominated all year, none of the most recent 10 daily gains has exceeded half a per cent and more than half of them were less than 0.1 per cent.
The dollar index, which tracks the greenback versus a basket of six key currencies, fell 0.202 points or 0.21 per cent, to 94.664.
A US Senate tax-cut bill, differing from one already in the House of Representatives, was expected to be unveiled yesterday, complicating a Republican tax overhaul push and increasing skepticism on Wall Street about the effort.
“There’s very much a risk of disappointment. The US dollar could go through a weakening phase on the back of uncertainty around that tax reform,” said Steven Dooley, currency strategist for Western Union Business Solutions.
Some also focused on fallout from Democrat wins in regional US elections this week as a signal for next year’s mid-term Congressional elections for President Donald Trump.
The euro was last up 0.29 per cent, at $1.1627, while Europe’s broad FTSEurofirst 300 index dropped 1.06 per cent at 1,535.4.
Oil prices steadied just below two-year highs, supported by supply cuts by major exporters, but analysts said the market could be vulnerable to a selloff after several months of gains.
US crude rose 0.74 per cent to $57.23 per barrel and Brent was last at $63.77, up 0.44 per cent on the day.
Spot gold added 0.3 per cent to $1,284.30 an ounce. US gold futures gained 0.11 per cent to $1,285.10 an ounce.
Cryptocurrency bitcoin skidded about three per cent but not before dipping almost five per cent.
It had hit a record high just shy of $8,000 yesterday after a coalition of developers and investors suspended a software upgrade planned for next Thursday that could have split the digital currency in two.