U.S. Stocks Fall as Dollar Weakens and Oil Rallies: Markets Wrap

  • U.S. inflation accelerated in August and jobless claims fell
  • Oil surpasses $50 a barrel, sending energy shares higher

BOE Holds Interest Rates Unchanged in 7-2 Vote

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U.S. stocks slipped and the dollar retreated as investors weighed renewed threats from North Korea. Oil topped $50 a barrel for the first time in a month.

The S&P 500 Index edged off an all-time high even as oil’s rally boosted energy shares. The Dow Jones Industrial Average rose a fifth straight day to a fresh record. The greenback weakened versus most major peers, while the pound jumped as the Bank of England signaled the possibility of stimulus reduction. Treasuries fell after U.S. inflation quickened, supporting an uptick in expectations for an increase in borrowing costs this year.

“Traders are really getting worked up by the resurgence of the policy tightening theme,” said John Hardy, the head of foreign-exchange strategy at Saxo in Hellerup, Denmark.

Chinese retail sales, industrial production and fixed-asset investment all slowed last month after a lackluster July as efforts to rein in credit expansion and reduce excess capacity in the world’s second-largest economy hit home. U.S. consumer prices increased 0.4 percent in August, after a 0.1 percent rise the prior month. Filings for jobless benefits in the U.S. unexpectedly settled back last week, underscoring a resilient labor market.

Bloomberg View columnist Dan Moss reports on the Fed’s inflation expectations.

Source: Bloomberg

Terminal subscribers can read more in our Markets Live blog.

Still to come this week:

  • U.S. retail sales and industrial production data are due Friday.

Here are the main moves in markets:

Stocks

  • The S&P 500 Index closed 0.1 percent lower.
  • The Stoxx Europe 600 Index closed 0.1 percent higher. 
  • Germany’s DAX Index fell 0.1 percent, the first retreat in more than a week. 
  • The U.K.’s FTSE 100 Index fell 1.1 percent to the lowest since May.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.3 percent. 
  • The euro rose 0.2 percent to $1.1903. 
  • The British pound gained 1.4 percent to $1.3397, the strongest in about a year.
  • The Japanese yen was little changed at 110.52 per dollar.

Bonds

  • The yield on 10-year Treasuries was little changed at 2.19 percent. 
  • Germany’s 10-year yield rose one basis point to 0.41 percent. 
  • Britain’s 10-year yield rose nine basis points to 1.23 percent.

Commodities

  • Gold rose 0.4 percent to $1,327.28 an ounce. 
  • West Texas Intermediate crude gained 0.8 percent to $49.69 a barrel and earlier touched $50.50. 
  • Copper fell 0.7 percent to $2.9595 a pound, the lowest in more than three weeks.

— With assistance by Adam Haigh, John Ainger, Lananh Nguyen, Samuel Potter, Robert Brand, and Nancy Moran

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