Tech Leads Stock Slump; Oil Falls to 4-Month Low: Markets Wrap

(Bloomberg) -- U.S. tech shares slumped as concern about trade tensions blunted optimism that slower-than forecast inflation would allow the Federal Reserve to cut rates. Oil plunged to a four-month low.

Chipmakers were among the worst performers as the S&P 500 Index slipped, with defensive sectors like utilities faring the best. The tech-heavy Nasdaq 100 declined the most in a week as Facebook fell. Crude dropped to the lowest since January on concern the trade dispute between the U.S. and China could trip up the global economy. The dollar strengthened and Treasuries climbed.

Just as investor concern over protectionism and global growth seemed to be easing, a fresh wave of uncertainty followed President Donald Trump’s announcement that he is personally delaying a trade deal with China and won’t complete the accord unless Beijing returns to terms negotiated earlier this year. The monthly inflation numbers released Wednesday supported the idea the Fed can cut borrowing costs after the president scowled at “way too high” interest rates.

“We have total opposing forces at play: trade and the Fed,” Jennifer Ellison, principal at San-Francisco based BOS, said in an interview at Bloomberg’s New York headquarters. “They’re balancing each other out, which is perhaps a good thing. But it’s not a time to just be exuberant and assume things will continue the way they have.”

Elsewhere, the Stoxx Europe 600 index posted its first drop in four sessions. That followed losses across Asia, where Hong Kong’s gauge underperformed as police used tear gas in an attempt to disperse protesters who have closed roads in the financial district. Gold rose as appetite grew for havens.

Here are some key events coming up:

• The race to succeed Theresa May heats up with the first Conservative Party leadership ballot Thursday.
• Euro-area finance ministers meet in Luxembourg Thursday. On the agenda: financial penalties for Italy over its debt load, and the euro-area budget.
• China and the U.S. release industrial production, retail sales data Friday.

And these are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.2% at the close of trading in New York.
• The Stoxx Europe 600 Index dipped 0.3%, the biggest decrease this month.
• The U.K.’s FTSE 100 Index decreased 0.4%, the first retreat in more than a week.
• The MSCI Emerging Markets Index sank 0.7%, the biggest dip in almost three weeks.

Currencies

• The Bloomberg Dollar Spot Index rose 0.3%.
• The euro weakened 0.3% to $1.1289.
• The British pound fell 0.3% to $1.2688.
• The Japanese yen was little changed at 108.51 per dollar.

Bonds

• The yield on 10-year Treasuries decreased two basis points to 2.12%.
• Germany’s 10-year yield was little changed at -0.24%.
• Britain’s 10-year yield rose one basis point to 0.87%.

Commodities

• West Texas Intermediate crude fell 4.2% to $51.01 a barrel, the lowest since January.
• Gold gained 0.5% to $1,333.14 an ounce.

--With assistance from Cormac Mullen, Adam Haigh, Todd White and Robert Brand.

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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