Tech Drags on Stocks as Sales Data Boosts Dollar: Markets Wrap

(Bloomberg) -- U.S. tech shares fell on concern a global trade war could sap profit. The dollar strengthened after data showing broad gains in retail sales suggested the economy is healthy enough to go without an interest-rate cut.

Chipmakers tumbled the most in almost a month after Broadcom Inc. trimmed its sales forecast, weighing on the S&P 500 Index. The benchmark stock gauge pared losses in afternoon trading and notched a 0.5% weekly gain. Treasury yields erased declines after May’s retail sales data was seen as undermining the case for a dovish turn by the Federal Reserve.

With heightened U.S.-China trade tensions threatening to weaken already fragile global economic growth and geopolitical concerns ratcheting up in the Middle East, equity investors had been banking on more support from central banks. The outlook for the Fed was in focus, with BMO strategists saying the odds of a cut next week are higher than many expect, while DoubleLine Capital’s Jeffrey Gundlach said he expects no reductions this month.

“Investors face a steepening wall of worry as geopolitical risk now joins lingering trade and Fed policy uncertainty as sources of anxiety,” said Alec Young, the managing director of global markets research at FTSE Russell.

Elsewhere, gold temporarily topped $1,350 an ounce, a level last seen in April 2018. The Stoxx Europe 600 Index fell the most in two weeks after a mixed session in Asia. The yuan was steady after Chinese industrial production in May missed estimates. Oil posted a weekly drop as investors monitored developments in the Middle East, with the U.S. blaming Iran for Thursday’s suspected tanker attacks.

These are the main moves in markets:

Stocks

• The S&P 500 Index slipped 0.2% at the close of trading in New York.
• The Stoxx Europe 600 Index decreased 0.4%.
• The MSCI Emerging Market Index fell 0.8% to the lowest in a week.
• The MSCI Asia Pacific Index dipped 0.3%.

Currencies

• The Bloomberg Dollar Spot Index gained 0.4%.
• The euro declined 0.6% to $1.1209, the weakest in two weeks.
• The British pound decreased 0.7% to $1.2584.
• The Japanese yen slipped 0.2% to 108.54 per dollar.

Bonds

• The yield on 10-year Treasuries was little changed at 2.09%.
• Britain’s 10-year yield rose one basis point to 0.84%.
• Germany’s 10-year yield fell one basis point to -0.26%.

Commodities

• Gold fell 0.1% to $1,340.86 an ounce.
• West Texas Intermediate crude rose 0.5% to $52.52 a barrel.

--With assistance from Ksenia Galouchko, Adam Haigh, Ranjeetha Pakiam, Namitha Jagadeesh and Yakob Peterseil.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, ;Jeremy Herron at jherron8@bloomberg.net, Brendan Walsh

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