NEW YORK (Reuters) - U.S. stocks fell on Monday, led lower by the energy sector as oil prices slumped, following European shares and the euro downward on global political uncertainty.
Investors are awaiting more details on President Donald Trump’s economic policies, while concern lingers over French politics ahead of a presidential vote in April.
“There are concerns regarding the backlash against any protectionist policies that come out of Washington and other countries and investors are seeking clarity,” said Adam Sarhan, chief executive officer at 50 Park Investments.
The euro fell to a one-week low against the dollar, while European stocks also dropped.
“Political risk is serving to dampen the euro after last week’s stumble from the $1.08 area,” said Shaun Osborne, chief FX strategist at Scotiabank in Toronto.
In late trading, the euro fell 0.4 percent against the dollar to $1.0742 EUR=. It earlier dropped to $1.0705, its weakest level since Jan. 31.
Investors were largely focussed on French politics, as far-right National Front leader Marine Le Pen launched her presidential bid, vowing to fight globalisation and take France out of the euro zone.
In the U.S. equity market, key indexes were modestly lower ahead of a slew of corporate results and lingering uncertainty over Trump’s policy decisions and their potential impact on the economy.
The Dow Jones Industrial Average .DJI fell 19.04 points, or 0.09 percent, to 20,052.42, the S&P 500 .SPX lost 4.86 points, or 0.21 percent, to 2,292.56 and the Nasdaq Composite .IXIC dropped 3.21 points, or 0.06 percent, to 5,663.55.
Oil slipped as ample U.S. supplies and excess speculation outweighed OPEC output curbs and rising tensions between the United States and Iran.
Brent LCOc1 futures fell $1.09, or 1.9 percent, to settle at $55.72 a barrel, while U.S. West Texas Intermediate crude CLc1 lost 82 cents, or 1.5 percent, to close at $53.01. It was the lowest close for both contracts since Jan. 31.
A stronger dollar also dampened oil prices. The greenback rose as much as 0.2 percent .DXY against a basket of major currencies before paring gains and trading flat.
The dollar slid to its lowest in more than two months against the yen JPY=, pressured by a drop in U.S. Treasury yields, analysts said.
European shares closed lower, with a negative note on carmakers and worries over Italian banks leading those sectors down. The pan-European STOXX 600 index fell 0.6 percent.
The risk-off sentiment boosted spot gold, which jumped 1.21 percent to $1,234.86 per ounce at 2100 GMT, the highest since Nov. 11. XAU=
The mounting political uncertainty in Europe and a dearth of information on Trump’s promised pro-growth policies also boosted U.S. Treasury prices, with the 5-year yield touching a two-week low of 1.850 percent.
“The longer Congress and the Trump administration dither on fiscal stimulus, the less likely in everyone’s estimation that it will come to pass,” said Aaron Kohli, an interest rate strategist at BMO Capital Markets in New York.
Additional reporting by Lewis Krauskopf, Gertrude Chavez-Dreyfuss, Scott DiSavino and Sam Forgione in New York; Editing by Nick Zieminski and Dan Grebler