Global Stocks

European stocks closed in negative territory Tuesday, but gains within the commodities group kept the decline somewhat in check.

The Stoxx Europe 600 SXXP, -0.79% fell 0.8% to close at 343.32, with only the basic materials SXPR, +1.31% and oil and gas SXER, +0.19% sectors advancing. The index on Monday slipped less than 0.1%, a second straight decline.

European traders apparently failed to take heart from the continued climb in U.S. equities, which hit records Monday as oil prices rallied.

Stocks in the U.K. fell Tuesday, pulling back after eight consecutive advances, but gains for miners limited the loss for the benchmark index.

The FTSE 100 UKX, -0.68% dropped 0.7% to 6,893.92, with only the mining sector finishing higher.

U.S. stocks closed at session lows Tuesday, a day after notching record highs, as investors weighed hawkish comments by Federal Reserve officials against sharp gains for oil futures, a weakening dollar and fresh consumer-price data that showed U.S. inflation remains tepid.

The S&P 500 index SPX, -0.55% fell 12 points, or 0.6%, to close at 2,178.15, as nine out of 10 sectors traded lower, led by a 2% drop in telecom stocks and a 1.2% loss in utility shares. Telecom and utilities are two income-paying stock sectors traditionally viewed as bond alternatives-which take a hit when interest-rate expectations rise.

Energy was the only S&P 500 sector to close in positive territory, up 0.2%, boosted by strong gains in crude-oil futures CLU6, -0.62%

The Dow Jones Industrial Average DJIA, -0.45% closed down 84.03 points, or 0.5%, at 18,552.02, pressured by a 1.6% declines in both Johnson & Johnson Inc. JNJ, -1.62% and Verizon Communications Inc. VZ, -1.59%

Asian shares pulled back from a one-year high and the dollar strengthened on Wednesday, after an influential Federal Reserve official said interest rates could rise as soon as September.

New York Fed President William Dudley said that as the U.S. labour market tightens and as evidence of rising wages builds, "we're edging closer towards the point in time where it will be appropriate I think to raise interest rates further."

Comments from Dudley, a permanent voter on policy and a close ally of Fed Chair Janet Yellen, also included an unusual warning on low bond yields and were seen as more hawkish than a cautious message last month.

Atlanta Federal Reserve Bank President Dennis Lockhart, seen as centrist, concurred saying he did not rule out a September hike - something markets have almost completely priced out.