Stocks flat, dollar falls on Trump chaos, Fed minutes

Wall Street indexes cut gains on Wednesday and the dollar reversed course on turmoil in Washington and US Federal Reserve meeting minutes that showed worries about low inflation.

Stocks pared earlier gains in a choppy session as investors worried that a backlash against President Donald Trump’s comments after a violent weekend rally would stunt his ability to deliver on his pro-business promises.

Fed policymakers were ready to roll out a plan to shrink its balance sheet but were increasingly wary about recent weak inflation and some called for a halt to interest rate hikes until it was clear the trend was transitory, according to the July meeting minutes.

US stocks regained some ground after the minutes, but were lower than where they were before Trump disbanded two high-profile advisory councils after several CEOs quit in protest at his remarks blaming violence in Charlottesville, Virginia, not only on white nationalists but also on the protesters who opposed them.

“This calls into question the ability of the Trump administration to get anything done in terms of tax and infrastructure reforms. It’s another piece of evidence of the administration’s mounting problems,” said John Doyle, Director Of Markets at Tempus Consulting, Washington.

The Dow Jones Industrial Average rose 21.94 points, or 0.1 per cent, to 22,020.93, the S&P 500 gained 1.95 points, or 0.08 per cent, to 2,466.56 and the Nasdaq Composite added 5.78 points, or 0.09 per cent, to 6,338.80.

The dollar index fell 0.32 per cent, with the euro up 0.29 percent to $1.1767 after Reuters reported that European Central Bank chief Mario Draghi would not signal policy changes at a meeting next week in Jackson Hole, Wyoming.

After the minutes, US Treasury yields stayed near session lows that they had hit in mid-afternoon as investors increased bids for government debt after news of Trump’s disbanding of the advisory panels.

Benchmark 10-year notes last rose 10/32 in price to yield 2.2325 per cent, from 2.266 per cent late on Tuesday.

The 30-year bond last rose 18/32 in price to yield 2.8127 per cent, from 2.84 per cent late on Tuesday.

Oil prices fell even though US crude stockpiles declined by the most in a year, as the government also reported that domestic crude production was edging higher.

US crude fell 1.49 per cent to $46.84 per barrel and Brent was last at $50.34, down 0.91 per cent on the day.

Spot gold reversed course and added 0.8 per cent to $1,281.23 an ounce as the dollar fell and investors turned back to safe haven assets.

Read: Trump disbands business councils after bosses resign

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