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U.S. Stocks Fall on Trade Concerns; Dollar Drops: Markets Wrap

U.S. stocks fell amid concern that the U.S. and China are struggling to get an initial trade deal done. The dollar declined.

The S&P 500 headed for its first drop in four sessions after President Donald Trump’s tariff comments over the weekend. Trade optimism sent stocks to multiple records last week. Qualcomm Inc. slid after a downgrade, pulling down chipmakers. Walgreens Boots Alliance Inc. surged following a Bloomberg News report that said KKR & Co. formally approached the company about a deal to take it private.

The greenback fell for the first time in six days. The pound rallied as Prime Minister Boris Johnson’s efforts to leave the European Union got a boost from the Brexit Party. The Treasury market is closed for the Veterans Day holiday.

“In last few weeks, we’ve been in positive of relative optimism in how the trade talks are progressing, but I’m not so sure we actually know whether that is occurring or not,” said Matt Forester, chief investment officer at BNY Mellon’s Lockwood Advisors. “I think markets have been skittish waiting for any concrete information about the trade talks.”

Trump’s comments over weekend trimmed investor confidence that the U.S. and China will be able to strike a first-phase trade deal. At the same time, data showed Chinese factory-gate prices dropping for a fourth month, heightening concern about the effect of the trade war on the world’s second-biggest economy. Still, Alibaba’s sales event kicked off with a bang, helping investors gauge how willing Chinese consumers are to spend as economic growth threatens to slip below 6%.

Elsewhere, emerging market shares fell the most in more than two months as stocks tumbled in Hong Kong amid violent clashes after a protester was shot by police. Crude oil pared losses.

Here are some key events coming up this week:

  • Earnings include Tencent, Nissan Motor, Japan Post Bank and Mitsubishi UFJ.
  • New Zealand’s policy decision is due Wednesday, with market pricing tilting in favor of an interest-rate cut.
  • Fed Chairman Jerome Powell addresses the Joint Economic Committee of Congress, in Washington Wednesday. Minneapolis Fed President Neel Kashkari speaks in La Crosse, Wisconsin.
  • Thursday brings China retail sales and industrial production data.
  • U.S. retail sales on Friday are forecast to rebound in October after unexpectedly falling the prior month.

These are the main moves in markets:

Stocks

  • The S&P 500 Index fell 0.3% as of 11:05 a.m. New York time.
  • The Stoxx Europe 600 Index was little changed.
  • The MSCI Emerging Market Index fell 1.3%.

Currencies

  • The Bloomberg Dollar Spot Index declined 0.1%.
  • The euro advanced 0.1% to $1.1033.
  • The British pound jumped 0.7% to $1.2866.
  • The Japanese yen increased 0.2% to 109.09 per dollar.

Bonds

  • Germany’s 10-year yield was little changed at -0.26%.
  • Britain’s 10-year yield was steady at 0.789%.
  • Japan’s 10-year yield declined one basis point to -0.063%.

Commodities

  • West Texas Intermediate crude was little changed at $57.20 a barrel.
  • Gold fell 0.5% to $1,452.34 an ounce.

\BLOOMBERG

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