U.S. Stocks Decline, Metals Drop in Fed Aftermath: Markets Wrap

  • Fed plans balance-sheet runoff as BOJ stands pat on rates
  • Gold tumbles below $1,300 an ounce, iron ore retreats

Wells Fargo's Wren Doesn’t See Much Market Upside

U.S. stocks fell from records, while Treasuries and the dollar were mixed as investors assessed the impact of the Federal Reserve’s signal that it intends to raise rates again this year. Gold tumbled and emerging-market assets slumped.

The S&P 500 Index retreated for the first time in five days, with technology shares leading declines as Apple Inc.’s selloff resumed. The dollar was little changed after rallying Wednesday, while Treasuries pared gains after a 10-year note auction. Metals from copper to iron ore slumped. The yen touched a two-month low as the Bank of Japan kept its monetary stimulus unchanged. West Texas crude declined.

U.S. equity markets continued to churn in one of the tightest ranges in history, with investors reluctant to add to bets that have pushed benchmark indexes to records. While the Fed’s decision boosted the dollar and Treasury yields, those moves faltered Thursday as investors looked past the prospects for a December rate hike to discount the likelihood that further increases will come in 2018 as inflation remains tepid.

Markets have also kept an eye on tensions over North Korea, with Donald Trump Thursday ordering new sanctions on individuals, companies and banks doing business with the country. Reaction to China’s credit downgrade by S&P Global Ratings was muted during U.S. hours, though base metals continued declines.

Terminal subscribers can read more in our Markets Live blog.

What to watch out for the rest of this week:

  • Mario Draghi will be giving the keynote speech at the annual conference of the European Systemic Risk Board.
  • Theresa May meets with her cabinet today to see how far she can go in promising money to the EU to advance Brexit negotiations, people familiar said. Her big speech is Friday.
  • The euro-area’s September consumer confidence data is due today.
  • Campaigning continues in Germany before the Sept. 24 election.
  • The OECD publishes the Interim Economic Outlook in Paris.

Here are the main moves in markets:


Stocks

  • The S&P 500 Index fell 0.3 percent to 2,500.77 as of 4 p.m. in New York.
  • The Dow Jones Industrial Average fell to 22,359.90, halting a nine-day winning streak.
  • Apple lost 1.7 percent to the lowest since Aug. 1.
  • The Stoxx Europe 600 Index rose 0.2 percent to the highest in a month. 

Currencies

  • The Bloomberg Dollar Spot Index fell 0.1 percent after earlier touching the highest in more than two weeks.
  • The euro climbed 0.5 percent to $1.1950.
  • The Japanese yen fell 0.1 percent to 112.334 per dollar, hitting the weakest in more than two months.

Bonds

  • The yield on 10-year Treasuries rose one basis point to 2.28 percent in a fifth straight day of declines in the note.
  • Germany’s 10-year yield climbed one basis points to 0.46 percent, the highest in more than six weeks.

Commodities

  • West Texas Intermediate crude fell 14 cents to settle at $50.55 a barrel.
  • Gold futures decreased 1.7 percent to $1,293.90 an ounce, the weakest in four weeks.
  • Copper futures declined 1.1 percent to $2.936 a pound.

— With assistance by Lu Wang, Sophie Caronello, and Eddie Van Der Walt

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