U.S. Futures Slip, Europe Stocks Slump; Oil Falls: Markets Wrap
Contracts for all three main equity gauges signaled more declines at the New York open as traders grappled with the impeachment investigation into President Donald Trump, seemingly taking little comfort from a Bloomberg report that China is preparing to buy more U.S. pork. The Stoxx Europe 600 index headed for its largest drop in six weeks, with Electricite de France SA the biggest loser after announcing extra costs and a possible delay in building two atomic reactors in Britain. Asian benchmarks retreated across the board, with losses of more than 1% in Hong Kong, South Korea, mainland China and India.
Crude futures declined after Saudi Aramco said it was ahead of schedule in restoring output that was reduced by a drone attack earlier in September. A dollar gauge was on track for its biggest advance since July, the yen fell and Treasuries stabilized.
Markets have seemed to gyrate on the twists and turns of the protectionist battle between the two largest economies, with this year’s epic bond rally recovering from a pullback and U.S. stocks lingering within sight of a record high. The sudden escalation of political risk in Washington comes as economic signals deteriorate globally, adding a fresh complication for investors trying to decide whether central banks will be able to shore up growth.
Elsewhere, the pound reversed its Tuesday gain as U.K. Prime Minister Boris Johnson returned to the country after Britain’s Supreme Court ruled that he’d broken the law by suspending Parliament. In Japan, five-year government bond yields fell to a record low following comments from central bank Governor Haruhiko Kuroda that added to speculation of an interest-rate cut in October.
Here are the main moves in markets:
- Futures on the S&P 500 Index fell 0.2% as of 7:23 a.m. New York time.
- The Stoxx Europe 600 Index sank 1.4%.
- Switzerland’s SMI Index sank 1.5%.
- The MSCI Asia Pacific Index sank 0.6%.
- The Bloomberg Dollar Spot Index jumped 0.3%.
- The British pound dipped 0.6% to $1.2408.
- The euro declined 0.2% to $1.0993.
- The Japanese yen weakened 0.2% to 107.33 per dollar.
- The Swedish krona weakened 0.3% to 10.6792 per euro.
- The yield on 10-year Treasuries fell one basis point to 1.64%.
- The yield on two-year Treasuries declined two basis points to 1.60%.
- Britain’s 10-year yield decreased two basis points to 0.513%.
- Japan’s 10-year yield dipped two basis points to -0.255%.
- West Texas Intermediate crude declined 1.5% to $56.45 a barrel.
- The Bloomberg Commodity Index decreased 0.6% to 78.86.