Board Displays DAX Index
Board Displays DAX Index Reuters

Investors re-adjusted their value calculations for risky assets on Tuesday, selling off stocks, bonds and commodity futures after a key Federal Reserve panel released minutes from its most recent meeting, suggesting the central bank was backing away from further monetary easing.

Barclays economist Michael Gapen expressed the Street's consenus view in an email to clients: At the December meeting, 'a number' of members judged that the current outlook could warrant additional accommodation. In January, this view was supported by only 'a few' members. In the March [Federal Open Market Committee] meeting, only 'a couple of members' said that.

He added, the rhetorical re-balancing was consistent with our expectations that no further quantitative easing is forthcoming absent a significant slowdown in the economy.

Also at play: worrisome news from Europe, including comments from a prominent bond manager suggesting that Portugal would seek to partially default on its bonds, and worse-than-expected reactions to the announcement of Spanish deficit projections.

Here's a look at how the markets fared:

Stocks. Asian stocks rallied as investors digested positive global manufacturing data released on Monday. European stock markets dipped sharply in the final minutes of trading, seemingly prompted by U.S. investors' move away from euro assets at the beginning of the New York market day. But those markets closed before the Fed minutes were released, igniting the broad U.S. sell-off. The benchmark S&P 500 Index of U.S. equities closed down 0.40 percent at 1,413.30, after having dipped more than 1 percent into the red earlier in the afternoon.

Bonds. Both high-yield and investment grade corporate bond indices declined, mirroring the wider de-leveraging in the equity market. The U.S. Treasury yield curve steepened dramatically, as investors sold off long- and medium-term debt on the expectation that the U.S. central bank was now less likely to bid for those assets during a new round of quantitative easing.

Commodities. Futures for delivery of all kinds of physical products -- metals, energy commodities and foodstuffs -- saw their prices drop on expectations that the Fed minutes would signal a stronger dollar. The only notable exceptions were natural gas and wheat. Contracts for both have been heavily sold recently and the upward movements likely reflected technical pressures.

Currencies. The dollar index rose 0.61 percent. Both the euro and the British pound fell but while the euro-to-dollar exchange went up only slightly, the pound fell sharply, to $1.5913, a difference of over one cent from the previous day. Several export-oriented economies, including Japan, Brazil and Singapore, saw their currencies outperform the greenback.