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U.S. stocks fell Wednesday as trade tensions simmered, with the White House said to be preparing to blacklist more Chinese technology companies. The dollar and Treasuries held their ground after the release of meeting minutes from the Federal Reserve, which stressed a patient approach to interest-rate changes.
The S&P 500 Index fell for the third session in four, with tech shares under pressure amid the latest developments in the trade war with China. Markets continue to run hot and cold as investors react to the near-daily salvos in the conflict, trying to size up how much damage they will bring to growth and supply chains. The Fed minutes put a damper on prospects for lower rates this year, weighing slightly on equity markets as fed funds futures showed a slight drop in the odds for a rate cut.
“It’s kind of like a doctor -- the first thing you do is do no harm,” Michael Kushma, chief investment officer of global fixed income at Morgan Stanley Investment Management, said after the minutes came out. “So if you don’t know exactly what to do, don’t do anything. Don’t give medicine if you don’t know what the implications will be. So I think its easy for them to justify doing nothing for an extended period of time absent some major change in fiscal policy, trade policy.”
Energy shares slid along with crude futures after an unexpected buildup in U.S. oil and gasoline stockpiles, while retail stocks declined on disappointing earnings from Lowe’s Cos. and Nordstrom Inc.
Retail and real estate shares led a decline in the the Stoxx Europe 600 gauge. Russia’s 10-year bond yields fell to their lowest level since the emerging-market currency crisis last August, after the Finance Ministry said it would consider returning to limited bond auctions. The pound extended a decline and gilts jumped as Prime Minister Theresa May faced pressure to quit within days.
Here are some notable events coming up:
- Counting of votes from the Indian general elections takes place Thursday as Prime Minister Narendra Modi attempts to secure a second term.
- The European Parliament holds continent-wide elections May 23-26.
- On Thursday, the ECB publishes its account of the April monetary policy decision.
And these are the main moves in markets:
- The S&P 500 Index fell 0.3% as of 4 p.m. New York time.
- The Stoxx Europe 600 Index dipped 0.1%.
- The U.K.’s FTSE 100 Index rose 0.1%
- The MSCI Emerging Market Index fell 0.1%.
- The Bloomberg Dollar Spot Index rose 0.1% to a five-month high.
- The euro fell 0.1% to $1.1153.
- The British pound dipped 0.3% to $1.266.
- The Japanese yen advanced 0.1% to 110.34 per dollar.
- The yield on 10-year Treasuries fell four basis points to 2.39%.
- Germany’s 10-year yield declined two basis points to -0.09%.
- Britain’s 10-year yield sank seven basis points to 1.015%, the biggest drop in two months.
- West Texas Intermediate crude sank 2.9% to $61.28 a barrel.
- Gold gained 0.1% to $1,273.88 an ounce.
--With assistance from April Ma, Adam Haigh and Todd White.
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