NEW YORK — Global equity markets and commodities were under pressure on Thursday as the dollar continued its recent string of gains and yet another Federal Reserve official talked up the chance of more than one hike in US interest rates this year.
The dollar was up 0.22% at 96.257 against a basket of major currencies, its fifth straight day of gains. The streak would be the longest run for the dollar in nearly a year and give the greenback its first weekly rise in a month.
The gains were extended after St. Louis Fed President James Bullard joined a chorus of officials on Wednesday in highlighting the chance of at least two rate rises this year, with the first perhaps as soon as April.
"I was surprised to hear all this chatter from other Fed directors, claiming that the current policy is too dovish," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.
The gains in the dollar continued to weigh on oil prices, with both Brent and US crude back under $40 a barrel, with Brent on track for its biggest weekly drop in two months. Record crude stockpiles in the US also dragged oil lower.
The Dow Jones industrial average fell 43.9 points, or 0.25%, to 17,458.69, the S&P 500 lost 6.48 points, or 0.32%, to 2,030.23 and the Nasdaq Composite dropped 1.20 points, or 0.03%, to 4,767.66.
US crude slumped 2.4% at $38.84 a barrel, after sliding 4% on Wednesday. Brent was last down 1.6% at $39.84.
The rally in crude prices had been a big factor in the equity run higher in recent weeks, helping the S&P 500 climb more than 12% off its February 11 low.
The oil pullback has pressured US and European equities this week, with both the pan-European FTSE 300 index and S&P 500 on pace for the worst weekly drop in six.
MSCI’s index of world shares, down 0.75% on the session, was down 1.6% for the week.
"It is amazing how correlated everything is to oil. That sort of becomes a self-fulfilling prophecy, that oil is going down so people sell stocks," said Massocca.
The stronger dollar and softer oil prices were reflected in US durable goods orders, which fell in February, while weekly jobless claims continued to point to a solid labor market.
Gold edged up to $1,220.95 an ounce, after hitting its lowest since late February at $1,212.20 but remained on track for its biggest weekly drop since November.
Copper, down more than 2% for the week, was off 0.38% at $4,9312 a tonne.