By Chuck Mikolajczak
NEW YORK (Reuters) - The dollar hit a four-month high against the yen and global equity markets edged up on Tuesday as investors awaited testimony by Federal Reserve Chair Janet Yellen this week and any signs of tighter U.S. monetary policy.
MSCI's measure of stock performance world-wide initially rose, lifted by expectations of robust global growth.
U.S. stocks had a choppy session, hitting session lows after President Donald Trump's eldest son released an e-mail chain related to a meeting with a Russian lawyer linked to the Kremlin during last year's election campaign.
Wall Street was then able to claw back its losses after the Senate announced a two-week delay to its August recess in order to work on legislation, giving investors hope the Republican agenda could be advanced.
"It says to me there's a commitment to make some of the changes that the markets would like to see," said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts.
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Europe's main bourses faltered despite a fresh flurry of M&A activity.
The dollar initially edged higher against a basket of currencies before losing ground in the wake of the comments from Trump Jr.
Interest rates are on the rise globally as the Fed is expected to tighten further this year, the Bank of Canada will likely raise rates this week, while comments suggest tighter European Central Bank policy and chatter from the Bank of England.
Fed Board Governor Lael Brainard said she believed the U.S. central bank should begin unwinding its balance sheet soon, but she would want to "move cautiously on further increases in the federal funds rate" to help push inflation higher toward its target.
Philadelphia Fed President Patrick Harker, a voter on the Federal Open Market Committee, also echoed Brainard's sentiment.
The pan-European FTSEurofirst 300 index lost 0.68 percent and MSCI's gauge of stocks across the globe gained 0.14 percent.
The Dow Jones Industrial Average rose 0.55 points, or 0 percent, to 21,409.07, the S&P 500 lost 1.9 points, or 0.08 percent, to 2,425.53 and the Nasdaq Composite added 16.91 points, or 0.27 percent, to 6,193.31.
The dollar index fell 0.26 percent, with the euro up 0.54 percent to $1.146.
The Japanese yen strengthened 0.17 percent versus the greenback at 113.87 per dollar.
U.S. Treasury yields slipped after the comments from the Fed officials, Benchmark 10-year notes last rose 4/32 in price to yield 2.3569 percent, from 2.371 percent late on Monday.
Yellen will deliver her semi-annual monetary policy testimony before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.
Crude oil was higher. Benchmark Brent crude settled up 64 cents to $47.52 a barrel. U.S. light, sweet crude also settled 64 cents higher to $45.04.
(Additional reporting by Caroline Valetkevitch)