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Bitcoin extends staggering rally; eyes $90K

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Tariff worries weigh on euro and yuan

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China exposure weighs on European stocks

(Updated at 10:13 a.m. ET/1513 GMT)

By Chuck Mikolajczak

NEW YORK, Nov 12 (Reuters) - Global stocks dipped on

Tuesday after five straight sessions of gains while the dollar

touched its highest level in over four months as investors gauge

the impact of U.S. President-elect Donald Trump's likely

policies on growth and inflation.

Investors have been pouring cash into assets believed to

benefit from Trump policies for his second term in office, in

which he has pledged to impose high tariffs on imports from key

trading partners, as well lower taxes and loosen government

regulations.

The S&P 500 has surged to record highs, in part due

to a jump in shares of banks, which are likely to

benefit from a reduced regulatory burden. Domestically focused

small-cap stocks have jumped on expectations for less

competition from tariffs and lower tax rates, as the Russell

2000 vaulted to a three-year high on Monday.

Bitcoin, the world's biggest cryptocurrency, has surged

about 30% since the Nov. 5 election as it rockets toward the

$90,000 mark. Trump is seen as a proponent of cryptocurrencies.

U.S. stocks have rallied since the election, with each of

Wall Street's three major indexes closing at record levels on

Monday.

But concerns that Trump's policies could reignite inflation

after a long battle following the COVID-19 pandemic have pushed

U.S. Treasury yields and the dollar higher. Markets will get the

latest inflation reading on Wednesday in the consumer price

index (CPI) for October.

"I don't attribute it to much more than a little bit of

profit taking after a fabulous week," said Paul Nolte, senior

wealth adviser and market strategist Murphy & Sylvest in

Elmhurst, Illinois.

The Dow Jones Industrial Average fell 61.89 points,

or 0.14%, to 44,231.24, the S&P 500 rose 0.27 point, or

0.00%, to 6,001.62 and the Nasdaq Composite rose 24.13

points, or 0.13%, to 19,322.90.

Shares of Home Depot ( HD ) were down 0.4%, giving up

earlier gains, after the home improvement retailer reported

quarterly results.

In Europe, shares were lower, weighed down by names with a

large exposure to China, as Trump was expected to select U.S.

Senator Marco Rubio as his secretary of state. Rubio is seen as

the most hawkish option on Trump's list.

MSCI's gauge of stocks across the globe

fell 4.00 points, or 0.46%, to 859.10. The STOXX 600

index fell 1.53%, while Europe's broad FTSE EuroFirst 300 index

fell 30.79 points or 1.52% as both were on track for

their biggest daily percentage drops since August.

The yield on benchmark U.S. 10-year notes rose 7

basis points to 4.378%, from 4.308% late on Friday, after the

bond market was closed on Monday.

Aside from the CPI data, investors will hear from several

Federal Reserve officials this week following the central bank's

latest policy announcement on Nov. 7 in which it cut interest

rates by 25 basis points.

Richmond Fed President Thomas Barkin said that with

inflation close to the Federal Reserve's 2% target, the labor

market resilient and the U.S. central bank in the process of

lowering borrowing costs, policymakers are ready to respond if

inflation pressures rise or the job market weakens.

The dollar index, which measures the greenback

against a basket of currencies, rose 0.52% to 105.97, with the

euro down 0.42% at $1.0609. The greenback has risen in

four of five sessions since the election to reach 106.03, its

highest level since July 2.

Against the Japanese yen, the dollar strengthened

0.5% to 154.48 while Sterling weakened 0.74% to $1.2774.

The dollar strengthened 0.25% to 7.245 versus the

offshore Chinese yuan.

The greenback is expected to continue to strengthen against

China's currency and those sensitive to its economy as a result

of Trump's trade policies and also because of expectations of

higher U.S. Treasury yields. Markets have been scaling back

expectations for more rate cuts from the Federal Reserve,

currently pricing in a 65.1% chance of a 25 basis-point cut at

its December meeting, down from 77.3% a week ago, according to

CME's FedWatch Tool.

U.S. crude rose 1.09% to $68.78 a barrel and Brent

rose to $72.56 per barrel, up 1.02% on the day, bouncing

back from a drop of more than 5% over the prior two sessions.