USA stocks extended losses on Wednesday, with the S&P 500 recording its longest losing streak in five years after the Federal Reserve, as expected, kept interest rates unchanged.
A steep decline in oil prices also shook investor confidence.
The Dow Jones Industrial Average declined 77.46 points, or 0.4%, to finish at 17,959.64. The Standard & Poor's 500 index lost 6 points, or 0.3 percent, to 2,105 and the Nasdaq composite fell 18 points, or 0.4 percent, to 5,134. Still, the S&P 500 is up about 4 percent for the year.
Investors are increasingly focusing on the USA presidential race, as polls between Hillary Clinton and Donald Trump appear to have tightened following last week's news that the FBI had opened a new investigation into Clinton's private email server. The narrowing in the race has brought more uncertainty.
Sovereign bond yields, which move inversely to prices, came under pressure.
Wall Street sold off on Tuesday, with the S&P 500 closing at the lowest level since July 7, amid growing concern over the impending USA presidential election and prospects for higher US interest rates.
The Mexican peso, which has been sensitive to the USA election in part because of Mr. Trump's comments on trade, extended declines Wednesday. However, a Trump victory in the election next week could cause such a degree of financial market volatility (due to concerns about its impact on the economy) that the Fed could decide to leave its interest rate regime unchanged well into 2017. Oil prices extended losses (http://www.marketwatch.com/story/oil-prices-retreat-on-expectations-for-a-big-jump-in-us-supply-2016-11-02) dropping to five-week lows after USA data revealed that crude stockpiles saw the largest weekly climb on record.
Crude oil prices fell for the fourth day after industry data showed a surprise build in US stockpile. Brent crude, the global standard, fell 1.28 dollars at 46.86 dollars a barrel. Broadcom rose $2.86, or 1.7 percent, to $171.66. That helped send energy stocks down more than the rest of the market. While traders doubt the Fed will raise interest rates this week, they will be looking for signs to firm up their expectations for a hike at the central bank's meeting next month.
"There is concern over Trump being unexpected, because the market has really priced in a Clinton win and it hasn't priced in a Trump win at all", said Ken Polcari, director of the NYSE floor division at O'Neil Securities in NY.
USA stocks ended lower in choppy trade on Tuesday as the Fed meeting loomed and mixed earnings as well as economic reports fueled anxiety ahead of the presidential election.
Yields on Spanish and Italian 10-year bonds also finished sharply higher.
CURRENCIES: The dollar fell to 103.28 yen from 103.97 yen, while the euro rose to $1.1094 from $1.1062.
In other energy trading, heating oil fell 5 cents to 1.47 dollars a gallon, wholesale gasoline fell four cents to 1.45 dollars a gallon and natural gas fell 11 cents to 2.792 dollars per 1,000 cubic feet.
But higher energy costs will further erode the spending power of households, whose spending accounts for more than two-thirds of United States economic activity.