U.S. Stocks Advance as Trade Simmers: Markets Wrap

(Bloomberg) -- U.S. stocks rebounded from the worst selloff since early April as a rally in American crude overshadowed lingering concerns about the impact of heightened trade tensions. The dollar advanced.

The S&P 500 Index rose back above its 50-day moving average, while technology shares hit hardest Monday bounced back to give the Nasdaq indexes advances. Energy producers led gains after oil popped above $70 a barrel following reports the U.S. is pressing allies to halt imports of Iranian crude. The dollar jumped versus major peers.

Read more on trade dispute’s impact here.

The spike in oil prices took some attention from the simmering trade tensions as investors await more clarity from the White House on its plans. President Donald Trump signaled he may take a less confrontational path toward curbing Chinese investments, backing down from earlier reports that the U.S. would bar Chinese money in certain technologies. As traders fret over the immediate outlook they also have doubts about the longer-term path for U.S. rates; the Treasury curve is the flattest in years, stoking fears about the prospect of a recession.

“Trade is weighing on the markets,” Carin Pai, director of equity management at Fiduciary Trust Company International in New York, said by phone. “But so far we do have the view that the fundamentals are strong enough to weather a lot of the negotiations, and we do think that right now a lot of it is negotiation.”

In Asia, Chinese equities entered a bear market on concern about the country’s ability to fight a trade war. West Texas Intermediate crude jumped 3.5 percent. Brent crude rose above $76 a barrel after U.S. Energy Secretary Rick Perry suggested a planned production hike isn’t enough to stop a price spike. The pound weakened as a new Bank of England member spoke about the risks of raising interest rates too fast. Emerging-market stocks dropped. Metals retreated, with zinc falling a ninth day and gold touching the lowest price this year.

Terminal users can read more in Bloomberg’s Markets Live blog.

These are key key events coming up this week:

• New Zealand and Indonesia monetary policy decisions on Thursday.
• U.S. personal spending probably increased in May for a third month, economists forecast ahead of Friday’s data.
• China manufacturing and non-manufacturing PMI are due on Saturday.

Here are the main market moves.

Stocks

• The S&P 500 rose 0.2 percent to 2,722.99 at 4 p.m. in New York.
• The Nasdaq 100 Index climbed 0.4 percent.
• The Russell 2000 added 0.7 percent.
• The Stoxx Europe 600 Index ended higher by less than 0.1 percent.
• The MSCI Emerging Market Index sank 0.5 percent to the lowest in about 10 months.
• The MSCI Asia Pacific Index declined 0.1 percent to the lowest in eight months.

Currencies

• The Bloomberg Dollar Spot Index increased 0.3 percent, the first advance in a week.
• The euro fell 0.1 percent to $1.1643.
• The Japanese yen fell 0.3 percent to 110.108 per dollar.
• The Turkish lira jumped 1.3 percent to 4.622 per dollar.

Bonds

• The yield on 10-year Treasuries was little changed at 2.88 percent.
• Germany’s 10-year yield rose one basis point to 0.34 percent.

Commodities

• West Texas Intermediate crude increased 3.5 percent to $70.48 a barrel.
• Gold futures fell 0.6 percent to $1,260.70 an ounce.
• Brent crude rose 2.3 percent to $76.43 a barrel.

--With assistance from Sophie Caronello, Andreea Papuc, Adam Haigh, Ranjeetha Pakiam and Eddie van der Walt.

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net;Sarah Ponczek in New York at sponczek2@bloomberg.net

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

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