All three major US indices declined on Tuesday as the market was disappointed at Federal Reserve Chairman Jerome Powell's remarks on the central bank's possible monetary policy moves as well as weaker-than expected economic data.
Indeed, US-China trade war anxieties found no relief in a White House official's remarks that Trump is "comfortable with any outcome" resulting from a planned meeting with Chinese President Xi Jinping at the Group of 20 summit convening in Japan on Friday.
The remarks led to negative sentiment for the market as they dampened the market enthusiasm of a more aggressive rate cut plan.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. "I have the right to fire him", Trump said in the interview on Wednesday, adding that he had "never suggested" doing so.
"While Powell's comments do not alter expectations that the Fed will ease sooner or later, they do leave a slightly negative impact on equities", said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui DS Asset Management.
Trump has criticized the Fed for making credit more costly past year and for failing to lower interest rates last week.
Powell, however, said Fed policymakers are wrestling with questions on whether uncertainties around USA tariffs, Washington's conflicts with trading partners and tame inflation require a rate cut.
Powell signalled that the course of USA monetary policies - including interest rates, bond purchases, and other tools - still largely depends on the incoming macroeconomic data, but didn't explicitly rule out possible easing due to rising trade risks and a global economic slowdown.
The pan-European STOXX 600 index fell 0.3% as it extended losses to a fourth day, on course to end a three week gaining streak fueled by expectations of more monetary stimulus globally and hopes of a revival in Sino-U.S. trade talks.
Trump said on Monday that without the Fed's rate rises the Dow Jones industrial average stock market index would be "thousands of points higher". Last week, at its policy meeting, the Fed made a decision to leave rates unchanged but opened the door to a cut.
"It's insane", he said Wednesday. But the kiwi's gains were limited as the central bank expressed concern towards economic risks at home and overseas. "A rate cut in July is a done deal".
A consensus is building that Powell and his colleagues will cut interest rates in coming months, as trade disputes hurt the outlook for the world economy.
"We are fighting on so many different fronts with competitors and those who are supposed to be friends", said Vincent Reinhart, chief economist at Mellon. Here's a guy, nobody ever heard of him before.
The baseline outlook for the USA economy remains favorable for continued growth, Powell said, but "the risks to this favorable baseline outlook appear to have grown".