Markets have enjoyed an upbeat start to the week
Markets have enjoyed an upbeat start to the week AFP / Daniel ROLAND

Wall Street stocks fell Tuesday as congressional Democrats moved towards launching formal impeachment proceedings against President Donald Trump, while the British pound gained on a sweeping court ruling that dimmed the chances for a no-deal Brexit.

Major US indices had opened higher, but tumbled into the red following weak consumer confidence data that showed Trump's trade war with China and rising tariffs are undermining sentiment.

Worries about trade were amplified when Trump, in a United Nations speech, adopted a hard line on China ahead of key trade talks next month.

The US president found himself on the defensive as Democratic leaders signaled they expect to launch an impeachment investigation.

After the market closed, House Democratic leader Nancy Pelosi announced a formal impeachment inquiry of Trump.

Democrats accuse Trump of an abuse of power in a reported attempt to pressure the newly installed president of Ukraine to open a corruption investigation into his lead challenger for the White House, Joe Biden, and Biden's son Hunter.

Art Hogan, chief market strategist at National Securities, said the push towards impeachment added to investor unease.

"The market doesn't have a good template for what that means," Hogan said.

"Anything that might make a dent in consumer confidence would be a negative."

Unanimous ruling

Earlier, the British pound gained against the dollar and euro after Britain's Supreme Court ruled Prime Minister Boris Johnson's suspension of parliament was unlawful.

Delivering the unanimous verdict of 11 judges, Supreme Court president Brenda Hale said the decision "was unlawful... because it had the effect of frustrating or preventing the ability of parliament to carry out its constitutional functions".

The pound rallied as traders bet Britain would now more easily avoid a no-deal departure from the European Union on October 31, analysts said.

Johnson, who took office on July 24, said he did not like the ruling but would go along with it.

Most members of the House of Commons oppose Johnson's threat to leave the EU next month even if he has not agreed exit terms with Brussels.

"Traders are wondering: 'What is next for UK politics?'" said CMC Markets analyst David Madden. "A general election seems like the next move." analyst Neil Wilson said, "It's hard to see how this gets the UK and EU any closer to a deal that will be approved by MPs, but it does really deliver a massive blow to Boris Johnson."

"It's perhaps not fatal, but it's not going to make life any easier and we are now faced with significant uncertainty of a different hue," Wilson said.

Key figures around 2050 GMT

New York - Dow: DOWN 0.5 percent at 26,807.77 (close)

New York - S&P 500: DOWN 0.8 percent at 2,966.60 (close)

New York - Nasdaq: DOWN 1.5 percent at 7,993.63 (close)

London - FTSE 100: DOWN 0.5 percent at 7,291.43 (close)

Frankfurt - DAX 30: DOWN 0.3 percent at 12,307.15 (close)

Paris - CAC 40: FLAT at 5,628.33 (close)

EURO STOXX 50: DOWN 0.1 percent at 3,532.05 (close)

Tokyo - Nikkei 225: UP 0.1 percent at 22,098.83 (close)

Hong Kong - Hang Seng: UP 0.2 percent at 26,281.00 (close)

Shanghai - Composite: UP 0.3 percent at 2,985.34 (close)

Brent North Sea crude: DOWN 2.6% at $63.10 per barrel

West Texas Intermediate: DOWN 2.2% at $57.29 per barrel

Pound/dollar: UP at $1.2493 from $1.2429 at 2100 GMT

Euro/pound: DOWN at 88.19 pence from 88.45 pence

Euro/dollar: UP at $1.1019 from $1.0993

Dollar/yen: DOWN at 107.09 yen from 107.55 yen