The dollar stumbled yesterday and US Treasury yields fell after a fresh setback to US President Donald Trump’s domestic agenda, while a mixed batch of earnings reports left US and European stock indexes lower.
The collapse of his fellow Republicans’ push to repeal and replace Obamacare with their own healthcare bill in the US Senate again raised doubts in financial markets about Mr Trump’s ability to enact tax cuts and infrastructure spending.
The dollar fell 0.6 per cent against a basket of key currencies, setting a 10-month low and extending its 2017 decline to more than seven per cent.
The Dow Jones Industrial Average fell 94.98 points, or 0.44 per cent, to 21,534.74, the S&P 500 lost 2.55 points, or 0.10 per cent, to 2,456.59. The Nasdaq Composite added 7.12 points, or 0.11 per cent, to 6,321.55.
Netflix shares soared after the streaming television company’s strong customer growth, boosting the Nasdaq.
Shares of Goldman Sachs and Bank of America fell after those banks’ respective quarterly reports, and weighed on bank indexes in the US and Europe.
In Europe, the pan-European FTSEurofirst 300 index lost 1.09 per cent. Sweden’s Ericsson tumbled after a worse-than-expected second-quarter loss.
MSCI’s gauge of stocks across the globe shed 0.05 per cent after touching an all-time high on Monday.
In currencies, the euro was up 0.84 per cent to $1.1574 against the dollar.
Aside from the Trump agenda setback, there are increasing doubts about further near-term rate hikes by the Federal Reserve.
Expectations for the Fed hiking interest rates this year have been pushed back to the fourth quarter, the latest Reuters poll of economists showed.
A poll conducted last month predicted the Fed would raise rates by September.
US Treasury yields fell after the latest political drama in Washington, while more data pointed to benign inflation with a drop in import prices for a second straight month.
Benchmark 10-year notes last rose 12/32 in price to yield 2.2678 per cent, from 2.309 per cent late on Monday.
Yields across the globe rose sharply after Trump won the United States election in November on promises for tax reforms and infrastructure investment that were expected to boost growth and inflation in the world’s largest economy.
Oil prices rose as demand soaked up some of the surplus supplies from Opec and the United States.
US crude rose 0.54 per cent to $46.27 per barrel and Brent was last at $48.74, up 0.66 per cent on the day.