Trade Talks Weigh on U.S. Stocks as Dollar Gains: Markets Wrap

(Bloomberg) -- U.S. stocks closed mixed in thin trading as the Trump administration and Canada were said to plan on resuming trade talks next week after discussions Friday ended with no deal. Emerging-market shares extended their slide, while the dollar climbed.

Volume in the S&P 500 Index was almost 14 percent below average ahead of a three-day weekend. The benchmark equity gauge ended little changed, weighed down by automakers, after the discussions in Washington were said to stall and plans were made to begin talks again Wednesday. Developing-nation stocks slumped for a third straight session and India’s rupee dropped to a record as contagion spread from Argentina and Turkey.

The S&P 500 ended the week up 0.9 percent, and 3 percent higher for the month.

Caution was the dominant theme in the final days of August even as the S&P 500 headed to its third straight weekly gain and fifth straight monthly advance after hitting a record high Wednesday. While the Federal Reserve remains on its tightening path and Chinese authorities have moved to stem declines in the country’s currency, the threat of global growth taking a hit from souring trade relations remains front and center for investors.

Click to hear Bloomberg reporters discuss the week in markets.

U.S. President Donald Trump wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as a public-comment period concludes next week, according to people familiar with the matter. In an interview with Bloomberg he also took a swipe at Europe, raising concern about the longevity of his recent agreement with Jean-Claude Juncker, which was intended to stave off a broader trade war.

Carmakers led the Stoxx Europe 600 Index lower after Trump cast doubt on the scope of a trade deal between the U.S. and Europe. European bonds edged higher while the euro fell as the region’s inflation unexpectedly slowed.

Elsewhere, West Texas crude fluctuated around $70 a barrel. Turkey’s lira rose after the country raised taxes on dollar deposits, making it more attractive for investors to plow money into the local currency. Argentina’s peso stabilized after a nine-day rout.

Terminal users can read more in our Bloomberg Markets Live blog here.

These are the main moves in markets:

Stocks

• The S&P 500 Index was little changed at the close in New York. The Nasdaq Composite Index added 0.3 percent and the Dow Jones Industrial average fell 0.1 percent.
• The Stoxx Europe 600 Index declined 0.8 percent on the biggest drop in more than two weeks.
• The MSCI Emerging Market Index dipped 0.2 percent.
• The Nikkei 225 Stock Average ended the day little changed.
• The Shanghai Composite fell 0.5 percent.

Currencies

• The Bloomberg Dollar Spot Index rose 0.3 percent to the highest in a week.
• The euro fell 0.5 percent to $1.1609.
• The Japanese yen fell 0.1 percent to 111.09 per dollar.
• The Turkish lira gained 1.3 percent to 6.5689 per dollar, the first advance in a week.

Bonds

• The yield on 10-year Treasuries rose one basis point to 2.86 percent.
• Germany’s 10-year yield decreased two basis points to 0.32 percent.
• Britain’s 10-year yield dipped three basis points to 1.43 percent.

Commodities

• The Bloomberg Commodity Index climbed 0.1 percent.
• West Texas Intermediate crude declined 0.5 percent to $69.93 a barrel.
• Copper fell 1.8 percent to $2.6685 a pound for the biggest drop in two weeks.
• Gold was little changed at $1,199.47 an ounce.

--With assistance from Adam Haigh, Eddie van der Walt, Samuel Potter, David Wilson and Sophie Caronello.

To contact the reporter on this story: Brendan Walsh in Austin at bwalsh8@bloomberg.net

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

©2018 Bloomberg L.P.