The US stock market dipped again on Wednesday, highlighting the simmering investor nervousness. But president Trump's latest interview shook up the US dollar and the Treasury market, notes Robin Wigglesworth.
The April 12 trading day is now over, and it's been an unexpectedly interesting one for US markets. The S&P 500 continued where it left off on Tuesday, trading nervously with low volumes. Trump talking about resurrecting Republican health care plans, rather than pivoting to more market-friendly areas like tax reform, hit industrial and financial stocks.
The nervousness was also apparent in the VIX index, a gauge of short-term expected volatility. The VIX has been staggeringly tranquil for most of 2016, but this week it has stirred, and Wednesday went above the 16 mark for the first time since November. But Trump's latest interview shook up markets later in the day. The US president said that the Fed Chair Janet Yellen wasn't necessarily toast when her term ends in 2018 and said that the dollar was getting too strong.
Now that poured more fuel on the US Treasury bond rally, pushing the 10-year yield down to a fresh post-election low of 2.24%. The greenback also reacted to Mr. Trump's comments with the DXY dollar index tumbling by 0.6%, the most since mid-March.