London: Shares in Europe dipped, Wall Street backed off record highs and the US dollar was poised to extend a three-day losing streak as underwhelming earnings and uncertainty over an ongoing US impeachment inquiry overshadowed hopes for a US-China trade deal.
The US benchmark S&P 500 index was nominally lower and Home Depot Inc pulled the blue-chip Dow Jones Industrial index firmly into the red after the home improvement retailer cut its 2019 sales forecast.
Talks continued between the world's two largest economies on an interim deal toward resolving their 18-month, market-rattling trade dispute that has damaged supply chains and upset global markets, even as Washington is set to impose a new round of tariffs on Chinese goods on December 15.
But as the impeachment hearings in the US House of Representatives gained momentum, the end game of the US-China trade war grew increasingly foggy. The inquiry focuses on a July 25 phone call in which President Donald Trump asked Ukrainian President Volodymyr Zelenskiy to carry out two investigations that would benefit him politically.
"There's a lot of pontification that (President Trump) needs a trade deal," said Robert Pavlik, chief investment strategist, senior portfolio manager at SlateStone Wealth LLC in New York. "And given the impeachment that's going on phase 1 is likely but he can't give up too much or he'll lose face."
"The impeachment inquiry is being paid special attention to by the Chinese," Pavlik added. "It puts the president in a less powerful position. He's somewhat disarmed and they know he has to reach some kind of agreement to get re-elected."
The Dow Jones Industrial Average fell 79.52 points, or 0.28 per cent, to 27,956.7, the S&P 500 lost 2.73 points, or 0.09pc, to 3,119.3 and the Nasdaq Composite added 12.52 points, or 0.15pc, to 8,562.46.
Hopes of a trade truce earlier in the day drove European stocks to a four-year high and world stocks to their highest in nearly two years, but those gains were pared later in the session.
The pan-European STOXX 600 index lost 0.06pc and MSCI's gauge of stocks across the globe gained 0.01pc.
Emerging market stocks rose 0.42pc. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.64pc higher, while Japan's Nikkei lost 0.53pc.
Long-dated US Treasury yields slipped for the seventh straight day as risk appetite weakened.
Benchmark 10-year notes last rose 4/32 in price to yield 1.7946pc, from 1.808pc late on Monday.
The 30-year bond last rose 16/32 in price to yield 2.2704pc, from 2.293pc late on Monday.
The dollar was nominally lower against a basket of major world currencies, giving up early gains. The dollar index, tracking it against six major peers, fell 0.02pc, with the euro up 0.11pc to $1.1082.
The Japanese yen strengthened 0.12pc versus the greenback at 108.56 per dollar, while Sterling was last trading at $1.2938, down 0.11pc on the day.
The protracted trade negotiations continue to weigh on crude prices, with Brent crude oil futures dipping below $62 per barrel.
US crude fell 1.93pc to $55.95 per barrel and Brent was last at $61.51, down 1.49pc on the day.
Spot gold rose 0.08pc to $1,470.56 an ounce.
Copper rose 0.53pc to $5,861.00 a tonne.
Three-month aluminum on the London Metal Exchange lost 0.46pc to $1,730.00 a tonne.
&uuid=(email))