The start of a historically strong month on Wall Street saw stocks sliding as traders shunned riskier corners of the market amid a selloff in cryptocurrencies. A rout in Japanese debt rippled through global bonds.
Caution prevailed as a rally that drove the S&P 500 to its longest streak of monthly gains since 2021 took a breather. A gauge of smaller companies dropped almost 1%. Crypto-linked shares sank sharply, with Bitcoin tumbling 7% to below $85,000.
Despite the reduced appetite for risk, Treasuries kicked off the week on the back foot as Japan's benchmark yields hit the highest since 2008 on signs the nation will boost interest rates.
Equities lost steam after investors wrapped up a choppy November with gains as speculation grew that the Federal Reserve is more likely than not to ease policy this month.
“There is little question that the action over the past two weeks bodes well for a year-end rally,” said Matt Maley at Miller Tabak. “We're still going to have to see some more upside follow-through this week to confirm that the worst is behind us.”
US factory activity shrank in November by the most in four months as orders weakened. This week's data include a much-delayed inflation number for September and a preliminary reading of consumer confidence in December due Friday.
The S&P 500 fell to around 6,830. Most tech megacaps slipped, though Nvidia Corp. bounced after Friday's rout. Energy producers joined a rally in oil.
The yield on 10-year Treasuries rose eight basis points to 4.09%. Merck & Co Inc. is seeking to raise as much as $8 billion through a corporate bond sale. The dollar slid.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.3% as of 11 a.m. New York time
The Nasdaq 100 fell 0.3%
The Dow Jones Industrial Average fell 0.5%
The Stoxx Europe 600 fell 0.2%
The MSCI World Index fell 0.3%
Bloomberg Magnificent 7 Total Return Index fell 0.1%
The Russell 2000 Index fell 0.7%
Currencies
The Bloomberg Dollar Spot Index fell 0.2%
The euro rose 0.3% to $1.1630
The British pound rose 0.1% to $1.3252
The Japanese yen rose 0.7% to 155.11 per dollar
Cryptocurrencies
Bitcoin fell 7.2% to $84,645.85
Ether fell 9.2% to $2,743.88
Bonds
The yield on 10-year Treasuries advanced eight basis points to 4.09%
Germany's 10-year yield advanced six basis points to 2.75%
Britain's 10-year yield advanced four basis points to 4.48%
The yield on 2-year Treasuries advanced four basis points to 3.53%
The yield on 30-year Treasuries advanced eight basis points to 4.74%
Commodities
West Texas Intermediate crude rose 1.5% to $59.40 a barrel
Spot gold fell 0.2% to $4,232.52 an ounce
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