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Traders work on the floor of the New York Stock Exchange (NYSE) in New York. Photographer: Michael Nagle/Bloomberg

(bloomberg)

(Bloomberg) -- U.S. stocks fell as crude plunged the most in two years and the dollar spiked higher amid renewed tensions over trade and geopolitics.

The S&P 500 dropped the most in two weeks, as energy and material producers tumbled at least 2 percent on renewed angst that the Trump administration’s trade stance will damp demand for commodities. Oil’s retreat took West Texas crude toward $70 a barrel, while metals and crop futures also slid. Caterpillar Inc. and Chevron Corp. led losses in the Dow Jones Industrial Average, and emerging-market equities fell the most since the end of June.

The dollar saw the biggest rise in a month, while the Japanese yen and Chinese offshore yuan dropped. Ten-year Treasury yields fell for the second day in a row.

Follow our live blog as China responds to latest tariff threats.

“We impose tariffs last night after the close and markets across the world are just wrecked,” George Maris, Janus Henderson’s co-head of equities, said in an interview at Bloomberg’s New York headquarters. “Over the prior three days we just had quiet and markets just were green across the board. This is right now the critical issue confronting markets.”

The newest salvo in the trade war shattered the momentary calm in the markets that had allowed investors to turn their focus to earnings and growth in the economy and sent the S&P 500 to the highest close since February. Investors continue to be caught in a push and pull between corporate results, which begin to pile in this week, and the growing specter of the trade war.

Terminal users can read more in Bloomberg’s Markets Live blog.

These are some events to look out for this week:

  • Earnings season gets into gear with JPMorgan Chase & Co. and Citigroup Inc. among the largest companies due to give results, as well as India’s Infosys Ltd.
  • The most noteworthy U.S. data may be the June inflation report on Thursday, which consensus expects will show both headline and core price growth picking up. There’s another deluge of Treasury debt sales too, with a total $156 billion of notes and bills offered during the week.
  • Chinese trade data due at the end of the week will probably show slightly slower export growth, after early indicators pointed to softer overseas demand and weaker export orders, Bloomberg Economics said.

And here are the main market moves:

Stocks

  • The S&P 500 Index sank 0.7 percent to 2,774.10 as of 4 p.m. New York time.
  • The Dow Jones Industrial Index declined 0.7 percent, the largest slide since the end of June.
  • The Stoxx Europe 600 Index fell 1.3 percent, the biggest tumble in more than two weeks.
  • The Topix Index declined 0.8 percent to 1,701.88.
  • Hong Kong’s Hang Seng Index fell 1.1 percent, the largest fall in more than a week.

Currencies

  • The Bloomberg Dollar Spot Index gained 0.7 percent, most since June 14.
  • The Japanese yen dropped 0.9 percent to 111.95 per dollar.
  • The offshore yuan fell 1.1 percent to 6.7227 per dollar.
  • The euro declined 0.6 percent at $1.1671.

Bonds

  • The yield on 10-year Treasuries fell less than one basis point to 2.84 percent.

Commodities

  • West Texas Intermediate crude dropped 4.7 percent to $70.67 a barrel, biggest decline since Feb. 9.
  • Gold declined 1 percent to $1,242.59 an ounce.

--With assistance from Sarah Ponczek, Phil Kuntz and Samuel Potter.

To contact the reporter on this story: Randall Jensen in New York at rjensen18@bloomberg.net

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

©2018 Bloomberg L.P.

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