Focus was also on the Federal Reserve, and when the U.S. central bank may next cut interest rates. At a central bank gathering in Portugal, Fed Chair Jerome Powell reiterated the need to understand the impact of Trump's tariffs on inflation before lowering rates.
But Powell also declined to rule out a possible rate cut at the Fed's July 29-30 meeting. Markets also seemed to include such a possibility: Fed Fund futures were baking in a roughly 20% chance of a cut at the July meeting, with chances deemed much more likely at the Fed's September meeting.
The rate path could become more clear with economic data in coming days, including the monthly U.S. jobs report on Thursday.
The dollar, which has fallen steeply this year, edged lower against a basket of major currencies.
In a mixed day on Wall Street, the S&P 500 and Nasdaq pulled back from record high levels, while another major U.S. index, the Dow Jones industrial average, moved closer to a record peak.
A 5% drop in Tesla shares weighed on the Nasdaq and S&P 500. Trump threatened to cut off subsidies for companies run by Tesla chief Elon Musk, escalating tensions between the one-time allies who have since fallen out.
Musk, who spent hundreds of millions on Trump's re-election, had renewed his criticism of the fiscal bill, which would eliminate subsidies for electric vehicle purchases that have benefited Tesla.
Tesla shares could get another jolt on Wednesday when the EV carmaker releases its quarterly delivery figures.
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