Tech leads stock slump as investors eye Fed, trade

Bloomberg

US tech shares slumped as concern about trade tensions blunted optimism that slower-than forecast inflation would allow the Federal Reserve to cut rates. Treasuries climbed and oil fell.
Chipmakers were among the worst performers as the S&P 500 Index slipped, with defensive sectors like utilities faring the best.
The tech-heavy Nasdaq 100 declined the most in a week. The Stoxx Europe 600 index headed for its first drop in four sessions, led by oil producers.
That followed declines across Asia, where Hong Kong’s gauge underperformed as police used tear gas in an attempt to disperse protesters who have closed roads in the financial district.
Just as investor concern over protectionism and global growth seemed to be easing, President Donald Trump’s announcement that he is personally delaying a trade deal with China and won’t complete the accord unless Beijing returns to terms negotiated earlier this year set in motion a fresh wave of uncertainty.
The monthly inflation numbers supported the idea the Fed can cut borrowing costs after the president scowled at “way too high” interest rates.
“With no assurance that China will meet with the US on the sidelines of the G-20 later this month, trade tensions continue to fuel market uncertainty,” said Nema Ramkhelawan-Bhana, an economist at FirstRand Bank Ltd in Johannesburg.
“Yet, the growing probability of Fed cuts is counterbalancing trade concerns. The matter is crucial to global growth.”
Elsewhere, oil slumped in New York after an industry report showed US crude inventories swelling further. The lira erased a decline after Turkey’s central bank left its policy rate unchanged. Gold rose as appetite grew for havens.
The race to succeed Theresa May heats up with the first Conservative Party leadership ballot on Thursday.
Euro-area finance ministers meet in Luxembourg on Thursday. On the agenda: financial penalties for Italy over its debt load, and the euro-area budget. China and the US release industrial production, retail sales data on Friday. And these are the main moves in markets:
The S&P 500 Index fell 0.1 percent in New York. The Stoxx Europe 600 Index dipped 0.2 percent, the biggest decrease in more than a week. The UK’s FTSE 100 Index decreased 0.4 percent, the first retreat in more than a week. The MSCI Emerging Markets Index sank 0.5 percent, the biggest dip in almost three weeks.
The Bloomberg Dollar Spot Index rose less than 0.1 percent. The euro fell 0.1 percent to $1.1318. The British pound was little changed at $1.2719. The Japanese yen rose 0.1 percent to 108.43 per dollar. The yield on 10-year Treasuries decreased two basis points to 2.12 percent. Germany’s 10-year yield fell one basis point to -0.24 percent. Britain’s 10-year yield was little changed at 0.86 percent.
West Texas Intermediate crude fell 2.5 percent to $51.96 a barrel, the lowest in a week. Gold gained 0.5 percent to $1,333.98 an ounce.