Stocks Drop on Trump’s Trade Remarks; Bonds Fall: Markets Wrap

(Bloomberg) --

U.S. stocks fell from a record high as President Donald Trump said he could impose more tariffs on China, reminding investors that the trade spat remains unresolved. Treasuries dropped and the dollar rose.

The S&P 500 Index halted a five-day rally, with energy producers joining an oil sell-off and technology giants facing an antitrust showdown with Congress. Goldman Sachs Group Inc. jumped on better-than-estimated results in its trading unit, and JPMorgan Chase & Co. rebounded from losses triggered by a disappointing lending outlook. Benchmark 10-year yields climbed on solid data, then pared their surge after Federal Reserve Chairman Jerome Powell said the central bank “will act as appropriate” amid increased uncertainties.

Investors remained locked into the notion of a Fed rate cut this month even after strong retail sales, factory output and housing data. While Powell’s remarks resembled his July 10-11 testimony to U.S. lawmakers, they continued to support the case for monetary easing amid risks stemming from Trump’s trade policies and slower global growth.

“Trade’s a big, big issue,” said Dave Campbell, a principal at San Francisco-based BOS, which manages about $4.5 billion. “There’s a lot of uncertainties -- all of these are weighing on people’s minds right now.”

Elsewhere, Bitcoin slid below $10,000 just three weeks after surging above it for the first time in more than a year as U.S. legislators expressed deep skepticism about the viability of cryptocurrencies. The euro slipped as investor confidence in Germany’s economic outlook fell. The pound slumped as the market once again reckoned with no-deal Brexit risk after the contenders to be U.K. prime minister toughened their rhetoric.

Here are some key events coming up:

• Bank of America Corp. and Taiwan Semiconductor are among companies due to report results this week.
• Monetary policy decisions are due in Indonesia, South Korea and South Africa on Thursday.

These are the main moves in markets:

Stocks

• The S&P 500 dipped 0.3% to 3,004.04 as of 4 p.m. New York time.
• The Stoxx Europe 600 Index added 0.4%.
• The MSCI Asia Pacific Index decreased 0.2%.

Currencies

• The Bloomberg Dollar Spot Index increased 0.4%.
• The euro declined 0.4% to $1.1209.
• The British pound decreased 0.9% to $1.2408.
• The Japanese yen dipped 0.3% to 108.28 per dollar.

Bonds

• The yield on 10-year Treasuries gained three basis points to 2.11%.
• Germany’s 10-year yield climbed one basis point to -0.24%.
• Britain’s 10-year yield increased two basis points to 0.821%.

Commodities

• The Bloomberg Commodity Index slid 1.1%.
• West Texas Intermediate crude sank to $57.62 a barrel.

--With assistance from Adam Haigh, Samuel Potter, Laura Curtis and Yakob Peterseil.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

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

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