The dollar dropped with Treasuries early Tuesday after President Donald J. Trump criticized Federal Reserve interest-rate hikes. U.S. equity futures tracked gains in Europe and Asia, setting the scene for a potential S&P 500 record.
Contracts for the Dow and Nasdaq also rose, but all eyes will be on the S&P 500 Index as it may head toward the January all-time closing high and equals the longest bull market on record.
The greenback's fourth day of declines drove the euro above the key $1.15 level amid thin summer liquidity after Mr. Trump was said to have lamented rising borrowing costs and complained that Jerome Powell hasn't proved to be a cheap-money Fed chairman. Treasuries gave back some of Monday's gains and European bonds were mixed before a meeting of the world's central bankers later this week, with peripheral debt outperforming.
Mr. Trump's comments on the Fed follow a series of U.S. rate hikes that have fueled global volatility, especially in emerging markets, at a time when investors are coming to grips with the burgeoning trade dispute.
Investors will be closely watching the Jackson Hole symposium in the coming days for clues on monetary policy, and for any response from Fed Chairman Powell to the American president's comments.
"As of today, the Fed's independence is guaranteed, but Trump has the ability to make his own appointments to the Fed board," said Bob Parker, a member of the Investment Committee of Quilvest Wealth Management and a former Credit Suisse senior adviser. "If Fed independence does get threatened, you're going to see a bond market reaction."