U.S. Stocks Fall; Treasuries Rise, Dollar Drops: Markets Wrap

(Bloomberg) -- U.S. stocks edged away from records as investors weighed expectations for easier monetary policy against concerns about a slowing global economy. Treasuries gained, while the dollar dropped.

The S&P 500 fell for a second session, stalling below last week’s all-time high that was fueled by the prospect of rate cuts. Health-care paced losses as Bristol-Meyers Squibb Co. tumbled after the company said it will strip out a top drug from its merger with Celgene Corp. to get regulator approval. Energy producers dropped in the wake of new U.S. sanctions on Iran. The Russell 2000 Index slumped.

Investors in risk assets have continued to shrug off signs of an economic slowdown and focus on the increasingly dovish tone at central banks around the world. That attention will intensify Tuesday when Fed Chair Jerome Powell discusses monetary policy. But sentiment could be at a crossroads as the conflict between the America and Iran has ramped up, and the meeting between China’s President Xi Jinping and Donald Trump this week at the Group of 20 conference in Japan presents a pivot point for trade relations between the two countries.

The 10-year Treasury yield dropped to 2.02%, while West Texas crude rose toward $58 a barrel. The euro touched a three-month high against the dollar even as data showed that a slump in German business confidence deepened in June.

It’s “a pretty good guess that we won’t see a whole lot of movement in front of the big upcoming meetings (G20 and OPEC),” wrote Matt Maley, equity strategist at Miller Tabak & Co. “Given the meeting between President Trump & President Xi at the one and the impact the situation with Iran could/should have on the other, the results of those meetings should be quite important to the stock market’s next move.”

Elsewhere, gold extended its advance above $1,400 an ounce, while Bitcoin surged toward 11,000.

Here are some key events coming up:

• Fed Chairman Jerome Powell speaks at the Council on Foreign Relations in New York Tuesday. He’ll discuss the challenges facing the U.S. economy.
• MSCI Inc. announces results of its 2019 Market Classification Review on Tuesday, including whether Kuwait gets upgraded from frontier to emerging-market status.
• The Group of 20 summit is in Osaka, Japan on Friday and Saturday.

These are the main moves in markets:

Stocks

• The S&P 500 fell 0.2% as of 4 p.m. in New York.
• The Nasdaq 100 Index dropped 0.3%, while the Russell 2000 Index slid 1.3%.
• The Stoxx Europe 600 Index decreased 0.3% to the lowest in a week.
• The MSCI Emerging Market Index advanced 0.1%.

Currencies

• The Bloomberg Dollar Spot Index dropped 0.1%.
• The euro rose 0.2% to $1.1388, the strongest in almost 14 weeks.
• The British pound was little changed at $1.2736.
• The Japanese yen was little changed at 107.31 per dollar.

Bonds

• The yield on 10-year Treasuries dipped four basis points to 2.02%.
• Germany’s 10-year yield declined two basis points to -0.31%.
• Japan’s 10-year yield advanced less than one basis point to -0.154%.

Commodities

• West Texas Intermediate crude rose 0.6% to $57.78 a barrel.
• Gold climbed 1.5% to $1,421.60 an ounce, reaching the highest in almost six years.

--With assistance from Anchalee Worrachate, Yakob Peterseil and Vildana Hajric.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@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, Randall Jensen

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