World shares were mixed, with Wall Street edging lower yesterday amid jitters over US-China trade talks, while the dollar and Treasury yields softened after investors digested recent comments by Federal Reserve Chair Jerome Powell.
Mr Powell said on Wednesday US interest rates were "just below" neutral, less than two months after saying rates were probably "a long way" from that point. Many investors read the remarks as signalling the Fed’s three-year tightening cycle was drawing to a close.
His comments briefly pushed the US 10-year bond yield below the psychologically key three per cent level yesterday, its lowest since mid-September. The yield, which had risen as high as 3.25 per cent earlier this month, inched back to 3.0152 per cent, from 3.044 per cent late on Wednesday.
The Dow Jones Industrial Average fell 154.99 points, or 0.61 per cent, to 25,211.44, the S&P 500 lost 19.06 points, or 0.69 per cent, to 2,724.73 and the Nasdaq Composite dropped 59.01 points, or 0.81 per cent, to 7,232.58.
Other stock markets were broadly higher, with MSCI's gauge of stocks across the globe adding 0.23 per cent.
In Europe, stock gains were driven by the tech, mining and autos sectors, which were the worst hit by recent losses. The pan-European STOXX 600 index rose 0.11 per cent.
Market participants are closely watching a meeting between Trump and Chinese leader Xi Jinping at the G20 summit tomorrow at which the leaders are expected to discuss trade.
Trump said yesterday there was "a long way to go" on tariffs with China and urged companies to build in the US to avoid them.
Yesterday's Wall Street dip comes a day after all three major indexes had rallied to close more than two per cent higher following Powell's remarks.
The dollar, which has outperformed bonds and the benchmark S&P 500 stock index this year amid rising interest rates and safe-haven flows triggered by global trade tensions, fell back.
The dollar index, tracking it against a basket of six major currencies, fell 0.04 per cent, with the euro up 0.22 per cent to $1.1391.
Sterling was last trading at $1.2785, down 0.30 per cent on the day, after Bank of England Governor Mark Carney warned a disorderly Brexit could trigger a worse economic downturn for Britain than the financial crisis.
US crude rose 2.11 per cent to $51.35 per barrel and Brent was at $59.54, up 1.33 per cent.
Italy's borrowing costs slipped, with 10-year yields dipping around two bps.
A bond auction enjoyed much better buying interest than at last week's deal targeting retail investors as the government has shown signs it could compromise with the European Union on its budget deficit target.