NEW YORK, June 24 — Global stock indexes were lower and the US dollar rose yesterday as investors digested comments from Federal Reserve officials that further interest rate hikes this year are likely.

San Francisco Fed Bank President Mary Daly said in an interview with Reuters that two more rate hikes this year is a "very reasonable” projection.

Fed Chair Jerome Powell in testimony to US lawmakers this week suggested the US central bank has not reached the end of its tightening cycle, while he provided reassurance that the Fed would proceed with caution.

Investors also weighed data yesterday showing US business activity growth slowed in June but services kept humming along.

"We’re starting to see signals from businesses that the demand is starting to ease up at the margin and that’s leading to recalibration of expectations of what future output looks like,” said Bipan Rai, North America head of FX strategy at CIBC Capital Markets.

The dollar index rose 0.557 per cent , with the euro down 0.67 per cent to US$ 1.0883 (RM5.08).

Nasdaq led losses on Wall Street, and all of the major S&P 500 sectors were lower in early trading.

The Dow Jones Industrial Average fell 203.54 points, or 0.6 per cent, to 33,743.17 , the S&P 500 lost 32.05 points, or 0.73 per cent, to 4,349.84 and the Nasdaq Composite dropped 142.98 points, or 1.05 per cent, to 13,487.63 .

The pan-European STOXX 600 index lost 0.30 per cent and MSCI’s gauge of stocks across the globe shed 0.93 per cent.

US Treasury yields fell, in line with the European bond market following weaker-than-expected euro zone data. In late morning trading, the yield on 10-year Treasury notes was down 6.4 bps at 3.735 per cent.

Euro zone government bond yields fell on news that German business activity, as measured by purchasing managers indexes (PMI) slowed notably in June, while French business activity contracted this month for the first time in five months.

In the energy market, US crude recently fell 1.17 per cent to US$68.70 per barrel and Brent was at US$73.42, down 0.97 per cent on the day. — Reuters