US stocks fell for a fourth day as investors were concerned about policy tightening and geopolitical risks. A measure of dollar strength reached a new high this month.

The pullback from the day's low came after Federal Reserve Vice Chair Lael Brainard made a case for caution, noting that previous rate hikes were still having an effect on the economy. Earlier, Chicago Fed President Charles Evans stated that the Fed must quickly reach a point where policymakers can feel comfortable pausing to reduce the risk of overshooting. While the US cash market was closed for Columbus Day, treasury futures traded lower.

As signs of a new escalation in the Russia-Ukraine war emerged, the dollar rose against almost all of its major counterparts. Turbulence gripped the gilt market in the United Kingdom, with the selloff accelerating despite the Bank of England extending its emergency backstop measures.

The mood remains tense ahead of Thursday's US inflation data and a slew of bank earnings, which will officially kick off the third-quarter season. A higher-than-expected inflation reading, on top of last week's strong labour report, will put additional pressure on the Federal Reserve to continue raising interest rates by 75 basis points beyond this year.