US open: Stocks dragged lower by banking sector, investors eye Fed speeches

US equity markets were in the red on Tuesday led by lower banking stocks, while investors also looked to speeches by Federal Reserve officials.

At 1534 GMT, the Dow Jones Industrial Average was down 0.85% to 20,728.28, the S&P 500 fell 0.89% to 2,352.24 and the Nasdaq dropped 1.24% to 5,828.09.

The Financial Sector SPDR ETF index was down 2.29% as the yield on the 10-year Treasury note fell to 2.44%.

Goldman Sachs was down 2.48%, Bank of America fell 4.09%, KeyCorp was down 4.65% and Fifth Third Bancorp was 4.12% weaker.

However, technology giants Facebook and Apple were the biggest risers on Tuesday up 0.68% and 0.54%, respectively. Facebook was boosted by a stock upgrade to 'buy' from broker BTIG and Apple gained after it introduced a cheaper iPad and red special edition iPhone, as well as a new free app called Clips that allows users to create videos.

Elsewhere, investors were eyeing speeches by Federal Reserve officials, who only last week raised interest rates by 25 basis points to between 0.75% and 1% and gave more dovish than expected tone regarding future rate rises.

Chicago Fed’s Charles Evans, reignited the dollar’s weakness after saying on Monday that he would support one or two more hikes in 2017, "countering aggressive bets expecting a further three or more hikes this year", according to analysts at Monex Europe.

Speaking in London earlier in the day, New York Fed President William Dudley said banks have a “long way to go” to reform their corporate culture, Reuters reported.

Kansas City Fed President Esther George due to give a speech on the economy in Washington at 1600 GMT, while Cleveland Fed’s Loretta Mester and Boston Fed’s Eric Rosengren will give speeches after the close.

In currency markets, the dollar was down 0.84% versus the pound to 0.8024, as sterling shot higher after data showed UK inflation overshot the Bank of England's 2% target in February for the first time in more than three years.

The greenback was 0.6% weaker versus the euro at 0.9256, which jumped to a six-week high after independent centrist Emmanuel Macro performed well in the first televised French presidential debate on Monday.

Against the yen, the dollar was off by 0.52% to 111.97.

Meanwhile, West Texas Intermediate was down 0.41% to $48.71 a barrel and Brent crude fell 0.33% at $51.45.

On the data front, the current account deficit shrank to $112.4bn in the fourth quarter from $116bn in the third, which was well below the consensus forecast of $129bn.

The deficit represents 2.4% of the country’s GDP, slightly below the 2.5% in the previous quarter.

In corporate news, General Mills slipped 0.63% after the Lucky Charms maker reported that sales fell for the seventh straight quarter.

Housebuilder Lennar fell 2.96% despite its first-quarter earnings coming in slightly ahead of analysts' expectations.

Results are due from Nike and FedEx after the closing bell.