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A visitor takes a photograph of screens displaying stock figures at the Tokyo Stock Exchange (TSE), operated by Japan Exchange Group Inc. (JPX), in Tokyo, Japan, on Monday, Oct. 22, 2018. Photographer: Kiyoshi Ota/Bloomberg

(bloomberg)

(Bloomberg) -- Stocks fell and the dollar extended gains after the Federal Reserve left interest rates unchanged while confirming it was still on course to hike in December.

Tech underperformed after Jack Dorsey’s Square Inc. gave a disappointing forecast and Roku Inc. reported slower growth, while a rout in energy companies helped pull down the S&P 500 Index from a one-month high. Oil fell a ninth straight day and reached a bear market. Treasury yields held steady.

Investors had largely anticipated that the Fed wouldn’t change interest rates at today’s announcement, so instead were focused on looking for any signals on the pace of policy tightening into 2019. The central bank said “economic activity has been rising at a strong rate” and job gains “have been strong,” acknowledging a drop in the unemployment rate, while repeating its outlook for “further gradual” rate increases in its statement.

“The Fed didn’t make any significant changes,” said Michael Ning, the chief investment officer at PhaseCapital. “They are sending a message: They are doing whatever they’ve been doing.”

Elsewhere, European stocks pared an earlier advance spurred by strong earnings from companies including AstraZeneca Plc, though they ended in the green after an upbeat day in Asia. Italian bond yields jumped after the European Union warned the nation’s budget deficit will move dangerously close to the bloc’s limit of 3 percent.

U.S. filings for unemployment benefits held near an almost five-decade low, indicating a robust job market. China reported a surge in exports and imports for October, months before the next round of tariff hikes in the trade war with the U.S. is set to kick in. Terminal users can read more in our Markets Live blog.These are the main moves in markets:

Stocks

  • The S&P 500 Index fell 0.3 percent as of the close of trading in New York; the Nasdaq 100 sank 0.6 percent.
  • The Stoxx Europe 600 Index increased 0.2 percent after gaining as much as 0.8 percent.
  • The Nikkei-225 Stock Average rose 1.8 percent to a two-week high
  • The MSCI Emerging Market Index slipped 0.6 percent.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.6 percent.
  • The euro fell 0.6 percent to $1.136.
  • The British pound declined 0.5 percent to $1.3061.
  • The Japanese yen fell 0.4 percent to 113.99 per dollar, the weakest in almost five weeks.

Bonds

  • The yield on 10-year Treasuries was little changed at 3.24 percent.
  • Germany’s 10-year yield rose one basis point to 0.45 percent.
  • The yield on Italy’s 10-year bonds jumped six basis points to 3.39 percent.

Commodities

  • Gold fell 0.2 percent to $1,223.88 an ounce, its fifth consecutive decline.
  • West Texas Intermediate crude fell 1.8 percent to $60.58 a barrel, the ninth consecutive decline.

--With assistance from Alexandra Harris, Natasha Doff and Samuel Potter.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

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

©2018 Bloomberg L.P.

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