S&P 500 on track to fall for ninth session, Japan's Nikkei lost 0.80 per cent

The U.S. dollar index rose on Thursday alongside Treasury yields after Federal Reserve policymakers showed unity in favouring more rate hikes next year.

Stocks, already under pressure from rising borrowing costs, were further weighed by concern over a simmering U.S.-Sino trade war. Shanghai's benchmark index closed at a near four-year low and China's premier warned of risks to the economy.

European shares were little changed and the S&P 500 was on track to fall for the ninth session in the past eleven.

Minutes of the Federal Reserve's latest meeting showed every Fed policymaker backed raising interest rates last month and also generally agreed that borrowing costs were set to rise further.

That reinforced expectations that U.S. yields will rise further despite President Donald Trump's view that the Fed is tightening too much.

"If interest rates continue to move higher from their current levels, investors will become even more reluctant to buy the dips in stocks," Hussein Sayed, chief market strategist at FXTM, wrote in a note.

The Dow Jones Industrial Average fell 45.49 points, or 0.18 per cent, to 25,661.19, the S&P 500 lost 6.26 points, or 0.22 per cent, to 2,802.95 and the Nasdaq Composite dropped 44.42 points, or 0.58 per cent, to 7,598.28.

The pan-European STOXX 600 index rose 0.04 per cent and MSCI's gauge of stocks across the globe shed 0.37 per cent.

Emerging market assets were weighed by the rising dollar.

"The last thing emerging markets, or the U.S. yield curve or equities, want is a reminder that U.S. rates are going to keep going up," Rabobank analysts told clients in a note.

Emerging market stocks lost 0.97 per cent, while MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.56 per cent lower.

Japan's Nikkei lost 0.80 per cent.

DOLLAR REMAINS STRONG

The greenback slightly extended the previous day's gains against a basket of its rivals on the Fed's perceived hawkish stance.

The dollar index rose 0.18 per cent, with the euro down 0.09 per cent to $1.1489.

The Japanese yen strengthened 0.12 per cent versus the greenback at 112.52 per dollar, while Sterling was the last trading at $1.3071, down 0.32 per cent on the day.

In its semi-annual currency report, the U.S. Treasury Department said a recent depreciation of China's yuan currency will likely exacerbate the U.S. trade deficit, and U.S. officials found Beijing appeared to be doing little to directly intervene in the currency's value.

The yuan fell 0.16 per cent to 6.9387 per dollar, its weakest level since January 2017.

Oil prices fell as the fourth weekly increase in U.S. crude inventories suggested ample supply, while Saudi-U.S. tension and falling Iranian exports kept the decline in check.

"Stocks are building," said Olivier Jakob, oil analyst at Petromatrix. "It's a continuous trend. Week after week, it does start to add up."

U.S. crude fell 0.4 per cent to $69.47 per barrel and Brent was last at $79.54, down 0.64 per cent on the day.

In the Treasuries market, the 10-year yield hit a one-week high on worries about the number of interest rate increases from the Fed.

Benchmark 10-year notes last fell 6/32 in price to yield 3.2013 per cent, from 3.179 per cent late on Wednesday.

The 30-year bond last fell 15/32 in price to yield 3.3713 per cent, from 3.346 per cent late on Wednesday.

(With inputs from agencies.)