Investing.com - Here are the top five things you need to know in financial markets on Tuesday, July 18:

1. All eyes on Washington as Republican healthcare bill collapses

Market sentiment took a hit after a second attempt by Republicans to replace Obamacare collapsed, delivering a major policy blow to the Trump administration.

Republican Senators Jerry Moran and Mike Lee announced their opposition to a revised Republican healthcare bill late on Monday.

In response, President Donald Trump said on Twitter that Congress should immediately repeal Obamacare and "start from a clean slate" on a new healthcare plan.

Meanwhile, Republicans in the House of Representatives took a first step toward tax reform, with the release of a fiscal 2018 budget plan that would allow a tax reform package to pass Congress without support from Democrats.

2. Dollar sinks to lowest since September

The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, touched its lowest since September at 94.50 in overnight trade. It was last at 94.55 in early U.S. hours, down 0.4%.

Against the yen, the dollar fell to 111.99, a level not seen since June 30, before bouncing back to around 112.30, while the euro rose to 1.1545 against the greenback, its highest level since May 2016.

Fading expectations for another rate hike by the Federal Reserve this year further weighed on the greenback. Futures traders are pricing in less than a 40% chance of a rate hike by December, according to Investing.com’s Fed Rate Monitor Tool.

3. Global stocks pulled lower

Global stock markets were mostly lower, pulled down by another setback to U.S. President Donald Trump's agenda.

Asian shares stepped back from more than two-year highs, with Japanese stocks falling in reaction to a stronger yen, while Chinese stocks stabilized after Monday’s slump.

In Europe, markets edged lower, with Germany's DAX down around 0.5%, following disappointing results from bluechips Ericsson (BS:ERICAs) and Lufthansa (DE:LHAG).

On Wall Street, U.S. futures pointed to a flat open ahead of the release of key earnings reports.

4. Goldman Sachs, Bank of America earnings in focus

Market participants continue to keep an eye on the quarterly reporting season with the focus on earnings from Goldman Sachs (NYSE:GS) and Bank of America (NYSE:BAC) out before the market open.

Johnson & Johnson (NYSE:JNJ), UnitedHealth (NYSE:UNH), Charles Schwab (NYSE:SCHW), Harley-Davidson (NYSE:HOG) and Lockheed Martin (NYSE:LMT) are also scheduled to report before the opening bell.