Markets wrap: Commodity drop stocks; Dollar gains

NEW YORK: A broad decline in commodities dragged European equities lower, while U.S. stocks futures also dropped on a report the probe into Russian meddling in the 2016 election may also examine President Donald Trump’s conduct. The dollar edged higher after the Fed’s hawkish tone on Wednesday.

Bloomberg’s commodity index fell to the lowest in more than a year as copper dropped and oil fluctuated. That meant miners and energy explorers were among the big losers as the Stoxx Europe 600 Index retreated for a second day. The dollar advanced after the Fed raised interest rates for the second time in 2017 and Chair Janet Yellen suggested the strength of the U.S. labor market will ultimately prevail over recent weakness in inflation.

Yellen played down a softening of price pressures in the last few months and voiced confidence the central bank was on course to hit its 2 percent inflation goal. The Fed’s actions and words struck a careful balance between showing resolve to continue tightening in response to falling unemployment while acknowledging the persistence of unexpectedly low inflation this year.

Policy makers agreed to raise their benchmark lending rate for the third time in six months, maintained their outlook for one more hike in 2017 and set out some details for how they intend to shrink their $4.5 trillion balance sheet this year.

Meanwhile, the special counsel investigating Russia’s interference in the 2016 election plans to interview two top U.S. intelligence officials about whether Trump sought their help to get the FBI to back off a related probe of former National Security Adviser Michael Flynn, according to three people familiar with the inquiry.