US stocks dipped Wednesday, ending a two-day rally, as the Trump administration unveiled details of its long-awaited tax reform plan.
Tax cuts have been Wall Street's top priority since the election of President Donald Trump. But analysts characterized the muted reaction to the announcement as a pullback after a strong rally the last two days.
European equity markets edged higher ahead of Thursday's European Central Bank meeting, while Japan's Nikkei marched up 1.1 percent.
"We got a big run up on the past few days as details of the tax plan had been leaked out and there was a bit of modest selling on the news," said Alan Skrainka, chief investment officer at Cornerstone Wealth Management.
The centerpiece of the Trump tax overhaul would be to cut the top corporate tax rate to 15 percent from the current 35 percent maximum, and increase deductions for individuals while simplifying the filing process.
But details were scant, and the plan could face a tough ride in Congress, in part over questions of how the tax cuts will be financed and whether they will explode the deficit.
Still, many are optimistic Washington will act.
Sam Stovall, chief investment strategist at CFRA, noted stocks are generally weaker from May to October, but "Should President Trump's tax reform proposal receive a warm welcome by Congress, 'sell in May' might be renamed 'swell in May.'"
- Europe out of steam -
European markets were electrified earlier in the week by news that centrist candidate Emmanuel Macron had led the first round of France's presidential election.
However, equities appeared to be out of steam on the eve of an interest rate decision from the European Central Bank.
"The bounce in equity markets appears to have exhausted itself for now, at least in Europe," noted Chris Beauchamp, analyst at IG trading group.
In foreign exchange activity, the euro jumped to $1.0951 in morning London deals -- the highest level since early November 2016 -- before slipping back slightly.
The currency was still supported by French election optimism, and reports the ECB could start to wind down its monetary easing program as eurozone economies continue to improve.
But most analysts believe the ECB will stick to the script Thursday, and for now will fend off calls to wind down its massive monetary stimulus, at least until the political waters in Europe calm down.
- Key figures at 2100 GMT -
New York - Dow: DOWN 0.1 percent at 20,975.09 (close)
New York - S&P 500: DOWN 0.1 percent at 2,387.45 (close)
New York - Nasdaq: DOWN less than 0.1 percent at 6,025.23 (close)
London - FTSE 100: UP 0.2 percent at 7,288.72 (close)
Frankfurt - DAX 30: UP 0.1 percent at 12,472.80 (close)
Paris - CAC 40: UP 0.2 percent at 5,287.88 (close)
EURO STOXX 50: DOWN 0.1 percent at 3,578.71
Tokyo - Nikkei 225: UP 1.1 percent at 19,289.43 (close)
Hong Kong - Hang Seng: UP 0.5 percent at 24,578.43 (close)
Shanghai - Composite: UP 0.2 percent at 3,140.73 (close)
Euro/dollar: DOWN at $1.0905 from $1.0934 at 2100 GMT
Pound/dollar: UP at $1.2849 from $1.2835
Dollar/yen: DOWN at 111.00 yen from 111.12 yen
Oil - Brent North Sea: DOWN 28 cents at $51.82 per barrel
Oil - West Texas Intermediate: UP 6 cents at $49.62 per barrel