Stocks notch back-to-back losses as dollar firm on Fed raising rates

A gauge of global stock markets slipped on Tuesday as the Dow and S&P 500 notched their first back-to-back losses in more than a month, while expectations the Federal Reserve will raise interest rates supported the US dollar.

Shares of large US pharmaceutical and biotechnology companies sold off after a tweet from U.S. President Donald Trump on the need to lower drug prices. Shares of Pfizer and Amgen each dropped more than 1 per cent.

The dollar rose 0.16 per cent against a basket of six major trading currencies, 0.29 per cent against the British pound and 0.14 per cent against the Swiss franc ahead of the Fed’s meeting next week. Jitters over economic and political developments in Europe also lifted the greenback.

The market is taking in stride expectations the Fed will raise rates, unlike past years, said Rahul Shah, chief executive of Ideal Asset Management in New York.

“As long as we keep getting macroeconomic data that’s supportive of a rate hike we’re going to continue to see stocks rally,” Shah said. “If financials continue to rally with higher rates and industrials rally with better economic data, that could be enough to power the market higher.”