(Bloomberg) -- Stocks pared losses as traders weighed the impact of escalating trade tensions between the U.S. and China on a day when futures and options contracts on indexes and individual stocks expire, generating high volume and wide market swings.
The S&P 500 Index rose from session lows Friday after China responded to U.S. President Donald Trump’s latest tariff threat with proposed levies of its own. Trade-sensitive sectors including tech hardware and industrials led decliners. Energy firms also got hit by a drop in oil prices. Consumer staples and telecoms gained, offsetting some of the drop.
Treasury yields dipped and Italian debt led a rally in European bonds, which was triggered a day earlier by the ECB ruling out a rise in interest rates until the second half of 2019. The euro gained after Thursday’s slump and the dollar was steady. West Texas crude slipped in the run-up to next week’s OPEC meeting, where a clash over raising production is brewing.
With reports suggesting America is already preparing a second list of targeted goods worth as much as $100 billion, China said it doesn’t want a trade war but would have to counter. Stocks in the country fell earlier, and the Shanghai Composite gauge closed at its lowest level since September 2016.
Emerging markets remain under pressure as worries about an overhaul of Argentina’s central-bank leadership roil the peso. South Korea’s won and Colombia’s peso led declines Friday. Meanwhile, Russia’s ruble pared a decline after the central bank extended a pause in monetary easing and said its shift to looser policy needs to be slower.
Terminal users can read more in Bloomberg’s Markets Live blog.
Here are the main market moves:
- The S&P 500 Index decreased less than 0.05 percent as of 2:34 p.m. New York time.
- The Stoxx Europe 600 Index decreased 1 percent.
- The U.K.’s FTSE 100 Index sank 1.7 percent.
- Germany’s DAX Index decreased 0.7 percent.
- The MSCI Emerging Market Index decreased 1 percent to the lowest in six months.
- The Bloomberg Dollar Spot Index declined less than 0.05 percent.
- The euro gained 0.4 percent to $1.1611.
- The British pound gained 0.2 percent to $1.3286.
- The Japanese yen advanced less than 0.05 percent to 110.59 per dollar.
- The yield on 10-year Treasuries declined two basis points to 2.92 percent, the lowest in over a week.
- Germany’s 10-year yield declined two basis points to 0.40 percent.
- Britain’s 10-year yield decreased one basis point to 1.328 percent.
- West Texas Intermediate crude decreased 2.8 percent to $65.04 a barrel, the biggest drop in over two weeks.
- Gold sank 1.8 percent to $1,278.93 an ounce.
- LME copper sank 2.2 percent to $7,020 per metric ton, the lowest in more than a week.
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