Stocks in Europe dropped by the most in three weeks, finishing Friday's session by stepping back from 14-month highs as investors questioned the prospects for U.S. tax policy changes under U.S. President Donald Trump. "European equities are on the back foot into the weekend, continued profit-taking dragging indices from recent highs. This stems from more tempered optimism towards Trump tax changes," with "pudding wanted for proof," by investors, said Mike van Dulken, head of research at Accendo Markets, in a note.
U.S. stocks staged a last-minute rally on Friday, with major indexes turning positive ahead of the closing bell and the Dow extended its record-setting streak as investors shrugged off concerns the rally was overdone. Both the S&P 500 and the Nasdaq rose for a fifth straight week, while the Dow brought its string of weekly gains to three.
Investors maintained a cautious stance to start the week, with Asian stocks broadly lower ahead of President Donald Trump's address to Congress on Tuesday, and a batch of Federal Reserve speakers and economic data. Japan led the declines amid a rising yen, which has pushed to the high end of its six-week trading range with the dollar at ¥112.
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