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Stocks slip, dollar pares gain in policy whirlwind
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Loading...U.S. stocks erased gains to end near session lows, while the dollar pared its advance as investors assessed a whirlwind of policy speculation that whipsawed assets throughout the day.
The S&P 500 Index halted a two-day rally spurred by anticipation President Donald Trump’s plan to overhaul taxes would boost economic growth, as officials left unanswered questions about how the proposal would be paid for. The equity benchmark earlier climbed above its record closing level only to retreat after reports that the administration may end Nafta and the Federal Communications Commission may roll back net-neutrality rules. At the same time, Freedom Caucus members endorsed a plan to repeal Obamacare.
The late-session retreat that also weighed on the dollar and crude halted a rally in risk assets sparked by the French election, corporate earnings reports and the promise of a a major tax overhaul. Attention now will turn to the Trump plan’s prospects in Congress as the White House ratchets up protectionist rhetoric that investors worry could harm global growth.
The Bank of Japan is widely expected to keep the settings on its monetary easing program unchanged at the end of a two-day policy meeting on Thursday. Though inflation remains well below the central bank’s 2 percent target, it’s ticking up.
The ECB sets monetary policy later that same day. With officials indicating little chance of a policy change, the focus will be on any signals from President Mario Draghi that the central bank is debating an exit from its extraordinary stimulus.
The Bloomberg Dollar Spot Index increased 0.3 percent, climbing for a second day after a 0.5 percent drop on Monday. It rose as much as 0.5 percent.
The yen was little changed at 111.074 per dollar, after dropping 1.2 percent on Tuesday.
The euro lost 0.2 percent to $1.0908, after four straight days of gains.
Source: Bloomberg
Jr Trader Alexander Kumanov
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