European stocks and U.S. futures were mostly lower Tuesday, while a speech from European Central Bank President Mario Draghi lifted the euro and government bond yields.
Futures pointed to a 0.1% opening decline for the S&P 500 and a 0.5% drop for the Nasdaq Composite, with technology companies expected to lag behind for a second session. Shares of Alphabet dropped 1.2% in premarket trading after the European Union's antitrust regulator fined Google EUR2.42 billion ($2.71 billion) for favoring its own comparison-shopping service in search results.
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General Motors fell 0.5% after it warned its expects industry vehicle sales to fall short of its original forecast for the year. Shares of oil and gas producers rose, however, offsetting some of the declines elsewhere as Brent crude oil climbed 1.5% to $46.73 a barrel.
Overseas, the Stoxx Europe 600 dropped 0.7% with all but the banks and basic resources sectors trading in negative territory. Automotive parts supplier Schaeffler issued a profit warning late Monday on pricing pressures, sending its shares down nearly 11%.
Bank shares advanced in Europe, however, with Italian lenders adding 1.2% after Italian authorities said Sunday they were prepared to spend as much as EUR17 billion ($19.03 billion) as part of the shutdown of two regional banks. Spanish banking group Bankia climbed 3.8% after it agreed to acquire Banco Mare Nostrum.
Investors were otherwise largely focused on a series of speeches by global central bank officials on Tuesday, including remarks from Mr. Draghi and Federal Reserve Chairwoman Janet Yellen.
The euro climbed 0.9% to $1.1279, around a two-week high, after Mr. Draghi expressed confidence eurozone inflation would ultimately pick up just as growth broadens, hinting the bank might start winding down its large monetary stimulus. Yields on 10-year German government bonds rose to 0.311% from 0.247% on Monday, while Treasury yields climbed to 2.174% from 2.135%. Yields move inversely to prices.
"You can clearly see a disconnect between markets and central banks [on the strength of inflationary pressures]" said Florian Ielpo, head of macro strategy at Swiss fund manager Unigestion.
If you see a stabilization of commodity prices, market participants will have to start agreeing with the Fed and the ECB that inflation is slowly picking up, sending bond yields higher, he said.
Ms. Yellen is also set to speak later Tuesday in London on global economic issues as the Fed considers the timing of future interest-rate rises and the start of its plan to wind down its asset holdings. Investors want to know whether Ms. Yellen believes recent softness in some U.S. economic data is transitory.
Policy makers' latest forecasts continue to project three interest-rate increases both this year and next. But fed-fund futures tracked by CME Group suggest investors currently see just a 13% chance of another rate rise by the end of the September meeting.
During a slow news week as the second quarter comes to an end, "what matters most is Fedspeak," said Kathy Lien, head of forex strategy at BK Asset Management.
Earlier, Australian equities were 0.1% lower as gains among major banks and miners were offset by declines in utilities and consumer shares. Korea's Kospi edged up 0.1% to another record close, while Japan's Nikkei added 0.4% following an earlier decline in the yen against the dollar.
The dollar hit its best level against the Japanese currency in a month, briefly trading above Yen112 before retreating. The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was last down 0.3%, with the dollar up 0.1% against the yen.
The British pound was up 0.3% at $1.2756 after the Bank of England's Financial Policy Committee on Tuesday said in its financial stability report that there are "pockets of risk" in the financial system that warrant vigilance from regulators and lenders.
--Kenan Machado, Robert Wall and Natalia Drozdiak contributed to this article.
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(END) Dow Jones Newswires
June 27, 2017 09:17 ET (13:17 GMT)