Stocks, the dollar and U.S. long-dated Treasury yields slipped on Monday as investors fretted that U.S. President Donald Trump’s defeat over healthcare reform foreshadowed difficulties delivering other campaign promises, in particular fiscal stimulus.
Trump’s failure to rally enough support from his own Republican party – which controls both houses of U.S. Congress – to repeal and replace Obamacare spurred a rush to safe-haven assets such as gold XAU=, the Japanese yen JPY= and the Swiss franc CHF=.
MSCI’s all-country world equity index .MIWD00000PUS was down 0.16 as the fall in risk appetite dominated Asian and European stock markets.
The index was dragged down further after a lower open on Wall Street when main U.S. stock indexes hit their lowest levels in six weeks.
“The markets around the globe are falling as a rethinking of the ‘Trump Trade’ begins to focus on reality,” Peter Cardillo, chief market economist at First Standard Financial in New York, wrote in a note.
“While we don’t expect a full-blown correction to commence at this time, we do see rising negative sentiment replacing the ‘Hope Trade.'”
The Dow Jones Industrial Average .DJI fell 66.4 points, or 0.32 percent, to 20,530.32, the S&P 500 .SPX lost 5.56 points, or 0.24 percent, to 2,338.42 and the Nasdaq Composite .IXIC dropped 6.13 points, or 0.11 percent, to 5,822.61.
European shares were hit by losses among miners and banks. Europe’s broad FTSEurofirst 300 index .FTEU3 dropped 0.5 percent at 1,477.12.
The U.S. dollar fell to its lowest since November against a basket of currencies as investors lost confidence in prospects for a U.S. fiscal spending boost under the Trump administration.
The dollar index .DXY had risen to a 14-year high near 104.00 in early January when expectations for inflation-boosting stimulus under the Trump presidency were at their peak. On Monday, the index slipped below 99.0, its lowest since Nov. 11, two days after the results of the presidential vote.