U.S. Stocks Mixed as Oil Slumps, Dollar Advances: Markets Wrap

  • Nasdaq at fresh record on tech gains, S&P 500 slips from high
  • Volatility slumps to multi-year lows after French elections

Saudi Arabia and Russia May Extend Oil Cuts

Most U.S. stocks fell as renewed selling in commodities from gold to crude sent materials producers lower. The dollar gained as bets increased for a hike in U.S. borrowing costs next month. Equity volatility remained near a 24-year low.

The S&P 500 Index slipped from a record, while technology shares boosted the Nasdaq Composite Index to a fresh all-time high. Bloomberg’s Dollar Spot Index showed the greenback at the highest in a month in the wake of a hawkish comments from Federal Reserve officials. Treasuries were steady. Oil slipped toward $46 a barrel on glut concerns. Emerging-market assets proved resilient, with equities gaining a second day.

Calm blanketed financial markets, with measures of equity and fixed-income volatility at multiyear lows after the dissipation of concerns over European populism in the wake of the French election. Impending central bank meetings, a potential unwind of the Fed balance sheet and more scheduled elections have so far failed to dent optimism. But with stocks at or near records, there is little impetus to place further bets on riskier assets.

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Key events this week:

  • Earnings continue to be released, with Walt Disney Co., Mitsubishi Corp., Toyota Motor Corp. and Deutsche Telekom AG among the most notable.
  • The Bank of England on Thursday publishes its interest-rate decision and quarterly Inflation Report.

Here are the main moves in markets:

Stocks

  • The S&P 500 fell 0.1 percent to 2,396.83 as of 4 p.m. in New York.
  • The CBOE Volatility Index edged higher after closing Monday at the lowest since December 1993.
  • The Stoxx Europe 600 added 0.5 percent, the highest since August 2015. Miners rose 1.7 percent.  
  • Emerging-market shares climbed 0.3 percent for a second day of gains.

Currencies

  • The Bloomberg Dollar Spot Index advanced 0.5 percent after jumping 0.5 percent on Monday.
  • The euro traded at $1.0875, down 0.4 percent. The currency fell 0.7 percent Monday following Macron’s victory as France’s next president, after trading at the highest level since November.

Bonds

  • The yield on 10-year Treasury notes rose one basis point to 2.40 percent after climbing four basis points on Monday.
  • French 10-year yields increased two basis points to 0.86 percent. Similar maturity German yields increased one basis point, to 0.43 percent.

Commodities

  • Gold fell to the lowest in almost 2 months as investors turn their attention to the outlook for rising U.S. interest rates amid easing political uncertainty in Europe.
  • Futures dropped 0.9 percent to settle at $1,216.10 an ounce, even after the China Gold Association said demand in the biggest consumer could jump to a four-year high.
  • Crude fell as Libyan output rose to the highest in more than two years, getting in the way of OPEC’s efforts to drain a global glut.
  • West Texas Intermediate oil slipped 1.2 percent to settle at $45.88 a barrel. Brent for July settlement slipped 61 cents, or 1.2 percent, to $48.73 a barrel
  • Zinc and nickel pulled base metals higher as mining equities stage rebound.

— With assistance by Eddie Van Der Walt, Simon Ballard, Stephen Spratt, Adam Haigh, and Samuel Potter

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