Stocks Pressured on Fresh Trade Fears; Dollar Dips: Markets Wrap

(Bloomberg) -- U.S. stocks tumbled the most in a month as investors grappled with the latest American threats to expand tariffs on Chinese goods. The dollar slipped and emerging-market currencies declined.

The S&P 500 Index retreated Monday after five straight days of gains, with technology companies including Amazon.com Inc., Apple Inc. and Microsoft Corp. leading decliners. Semiconductor stocks also slumped, and the Nasdaq 100 Index saw its biggest drop since June. Investors sought refuge in consumer-staple and energy stocks such as Procter & Gamble Co. and Exxon Mobil Corp.

Shares in Hong Kong and China declined on news that President Donald Trump had instructed aides to proceed with tariffs on $200 billion in Chinese products. Beijing has already said it will retaliate, according to people familiar with the decision. Trump said he would make an announcement on China trade after U.S. financial markets close.

“The vector for trade-related global equity weakness today is tech, rather than China and emerging markets,” said Naufal Sanaullah, chief macro strategist at EIA All Weather Partners. “If the recent weakness in U.S. tech represents sufficient digestion of 10 percent tariffs on another $200 billion in Chinese imports, then any announcement could mark a short-term bottom in tech and it becomes all about the U.S. dollar again.”

The Stoxx Europe 600 Index closed higher, with fashion store Hennes & Mauritz AB beating forecasts to help retailers outperform. Italian bonds rallied while other core European debt turned lower. Benchmark U.S. Treasury yields hovered just under 3 percent.

Elsewhere, oil wavered as international supply concerns were overshadowed by a looming demand drop. Emerging-market stocks weakened and their currencies were led lower by a slide in India’s rupee, South Korea’s won and Turkey’s lira. Base metals including copper as the looming trade conflict spurred concerns about demand.

Terminal users can read more in our Markets Live blog.

Here are some key events coming up this week:

• South Korean President Moon Jae-in visits Pyongyang for a summit with Kim Jong Un Tuesday.
• Japanese trade-flow numbers are due on Wednesday.
• The Bank of Japan holds its policy meeting on Wednesday.
• Britain releases inflation data on Wednesday
• European PMIs are due on Thursday
• The Organization of Petroleum Exporting Countries and its allies meet in Algiers this weekend.

These are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.6 percent as of 4 p.m. New York time
• The Stoxx Europe 600 Index rose 0.1 percent.
• The U.K.’s FTSE 100 Index fell less than 0.05 percent.
• The MSCI Emerging Market Index sank 1.2 percent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.3 percent.
• The euro rose 0.5 percent to $1.1684.
• The British pound gained 0.7 percent to $1.3162.
• The Japanese yen rose 0.2 percent to 111.82 per dollar.
• The MSCI Emerging Markets Currency Index declined 0.2 percent.

Bonds

• The yield on 10-year Treasuries fell one basis point to 2.99 percent.
• Germany’s 10-year yield increased one basis point to 0.46 percent.
• Britain’s 10-year yield rose one basis point to 1.536 percent.

Commodities

• The Bloomberg Commodity Index fell 0.4 percent.
• West Texas Intermediate crude fell 0.4 percent to $68.71 a barrel.
• LME copper fell 0.5 percent to $5,945.00 a metric ton.
• Gold rose 0.4 percent to $1,200.08 an ounce.

--With assistance from Adam Haigh, Eddie van der Walt, Jessica Summers and Luke Kawa.

To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Andrew Dunn

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