U.S. Stocks Fall on Trade Rhetoric, Tech Jitters: Markets Wrap

(Bloomberg) -- U.S. stocks fell for a fourth straight days after President Donald Trump’s threat to escalate the trade war with China roiled technology and multinational shares. The dollar climbed and Treasuries fell as wage gains bolstered the prospects for further rate hikes.

The Nasdaq 100 Index capped its worst week since March as Apple slumped on its warning that the Trump administration’s musing over levying virtually everything imported from China would hit a broad range of its products. The S&P 500’s weekly drop was the most since June and Boeing led declines in the Dow Jones Industrial Average. The dollar rallied versus major peers and the offshore Chinese yuan fell the most in a week. The 10-year Treasury yield pushed above 2.94 percent.

The latest salvo from Trump in the trade war rattled U.S. stocks a day after top American executives made a last-minute push to convince the president to not impose fresh tariffs. Instead, Trump Friday signaled he’s ready to target a sum of goods equal to virtually all imports from China. The tariff drama overshadowed an August jobs report that showed a healthy labor market with signs of wage inflation that could clear the way for two more rate hikes this year.

“The risks are real and there’s increasing evidence that we’re closer to more of a full blown trade war,” Bong-Seok Choi, director of research at San Francisco-based Wetherby Asset Management, said by phone. “The trade wars only serve as a catalyst for the turning of the cycle. Things can change rather quickly, so the trade war, if a lot of the threats do materialize, I think things will turn very quickly.”

Emerging-market equities snapped seven days of declines while a gauge of currencies also rose. The Stoxx Europe 600 Index pared its worst weekly slide since March. Equities fell in Japan and Australia, while those in China posted gains. Oil had its worst week since July. Gold fell for the eighth week of the past nine.

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

These are the main moves in markets:

Stocks

• The S&P 500 fell 0.2 percent at 4 p.m. in New York.
• The Nasdaq 100 lost 0.3 percent. It’s weekly loss of 2.9 percent was the worst since March.
• The Stoxx Europe 600 added 0.1 percent. It fell 2.2 percent for its worst week since March.
• The MSCI Emerging Market Index rose for the first time in more than a week.
• The MSCI Asia Pacific Index declined a seventh straight day to its lowest in a year.

Currencies

• The Bloomberg Dollar Spot Index rose 0.4 percent.
• The euro dipped 0.5 percent to $1.156.
• MSCI’s emerging-market currency index added 0.1 percent to halt a four-day slide.
• The Japanese yen decreased 0.2 percent to 111 per dollar.

Bonds

• The yield on 10-year Treasuries advanced seven basis points to 2.94 percent.
• The two-year yield jumped seven basis points to 2.7025 percent, the highest intraday since July 2008.
• Germany’s 10-year yield climbed three basis points to 0.387 percent.

Commodities

• West Texas Intermediate crude fell 2 cents to settle at $67.75. Prices ended the week down 2.9 percent, the most since July.
• Gold futures fell 0.3 percent to end at 1,200.40 an ounce.

--With assistance from Adam Haigh and Yakob Peterseil.

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, Robert Brand

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