“For a market that was supposed to be desperate for the passage of US tax cuts, investors don’t seem particularly enthused by the Republicans’ success in actually getting something done,” said market analyst Chris Beauchamp at online trading firm IG.
“Equities are broadly softer across the board this afternoon, while a turn lower for the US dollar shows that investors believe that tax cuts are not yet a done deal,” he added.
The House of Representatives, as expected, approved on Thursday its version of the tax reform legislation, while a key Senate panel cleared a different version.
However, the path to majority backing of the legislation is considered much tougher in the upper chamber of Congress than in the House.
Leading analysts vary in their assessment of the odds that Washington will ultimately succeed in passing the measure.
The dollar, meanwhile sank on a report that Trump’s election campaign team was issued with a subpoena for more documents as part of a Russia collusion probe.
The Dow was down 0.4% approaching midday in New York.
In Europe, London’s FTSE 100 ended the day 0.08% lower at 7,380.68 points, while in Paris the CAC 40 shed 0.3% at 5,319.17 points and the DAX 30 in Frankfurt gave up 0.4% at 12,993.73 points, while the EURO STOXX 50 dropped 0.5% at 3,548.04 points.
European indices also stumbled on stubborn fears over Britain’s EU departure, with sentiment also dented by the strong euro and pound.
European Union leaders warned British Prime Minister Theresa May at a Gothenburg summit yesterday that the “clock is ticking” to make Brexit concessions — and it is increasingly likely discussions will fail to move on to the next phase as hoped in December.
In Berlin, tough talks to form Germany’s next government went into overtime yesterday, putting Chancellor Angela Merkel’s political future in the balance as failure to produce a deal could force snap elections.
“Markets are continuing to consolidate,” City of London Markets trader Markus Huber told AFP.
“There are a few worries, like ongoing Brexit negotiations and the stalling of Germany’s Merkel forming a coalition government, but overall global growth and corporate earnings remains firm.”
The greenback was, meanwhile, dented by a Wall Street Journal report.
The Journal, citing a source familiar with the matter, reported that Robert Mueller’s team issued a subpoena in October to request Russia-related documents from more than a dozen top officials in Trump’s campaign.
