Stocks decline as trade fears linger: Oil climbs; markets wrap

U.S. stocks fell to the lowest level since May and Treasuries rallied amid renewed concern that the Trump administration will crack down on Chinese investment. Energy producers surged with crude, while the dollar jumped.

The S&P 500 Index erased gains that reached 0.9 percent to finish at the worst level since May 29. Comments from Larry Kudlow re-established the White House’s hard line on trade even after President Donald Trump softened his stance. Tech bore the brunt of selling as the White House intentions on limiting Chinese investment remained murky. Banks in the S&P 500 fell a record 13th straight day. Exxon Mobil Corp. rallied as oil moved toward $73 a barrel, though the Dow Jones Industrial Average pushed its loss in the year past 2 percent.

Trade dominated U.S. equities for a third straight day as investors grapple with the implications of the on-again, off-again dust-ups with key partners. Federal Reserve Bank of Atlanta President Raphael Bostic yesterday warned that disruption to trade could increase risk to the economy. Crude added to its surge sparked by the U.S.’s request of allies to halt imports of Iranian oil.

“It’s clearly been acting as a negative on the stock market,” Jeffrey Kleintop, chief global investment strategist at Charles Schwab, said in an interview at Bloomberg’s New York headquarters. “On days or times during the day like earlier today where trade issues appear to be receding, stocks tend to head higher, and I think ex the trade issues that’s where we’d be going.”

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

These are key key events coming up this week:

• New Zealand and Indonesia monetary policy decisions on Thursday.
• U.S. personal spending probably increased in May for a third month, economists forecast ahead of Friday’s data.
• China manufacturing and non-manufacturing PMI are due on Saturday.

Here are the main market moves.

Stocks

• The S&P 500 fell 0.6 percent at 4 p.m. in New York.
• The Nasdaq Composite Index lost 1.3 percent.
• The Stoxx Europe 600 Index climbed 0.7 percent.
• The MSCI Asia Pacific Index dipped 0.8 percent to the lowest in more than eight months.
• The MSCI World Index of developed countries fell 0.1 percent.

Currencies

• The Bloomberg Dollar Spot Index advanced 0.6 percent to the highest in a week.
• The Japanese yen declined 0.2 percent to 110.266 per dollar.
• The euro decreased 0.8 percent to $1.1555.
• The British pound declined 0.8 percent to $1.3117, the weakest in more than seven months on the largest fall in more than a week.

Bonds

• The yield on 10-year Treasuries fell five basis points to 2.83 percent, reaching the lowest since May 29 on its fifth straight decline.
• Germany’s 10-year yield declined two basis points to 0.32 percent.
• Britain’s 10-year yield declined six basis points to 1.246 percent, the lowest in almost four weeks on the biggest fall in more than a week.

Commodities

• Gold futures fell 0.2 percent to $1,257 an ounce, the weakest in more than six months.
• West Texas Intermediate crude rose 1.5 percent to $71.59 a barrel in New York.
• Brent crude climbed 1.1 percent to $77.14 a barrel, the highest in almost three weeks.

— With assistance by Angela Cullen, and Eddie van der Walt