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Bloomberg
US stocks headed for their worst day in two months, joining a broad decline in global equities as disappointing earnings from Chinese internet giant Tencent Holdings Ltd. roiled technology shares and a plunge in commodities weighed on resource producers. Crude tumbled to below $65 a barrel after a report that American stockpiles rose the most since March 2017.
The S&P 500 Index fell for the fifth time in six sessions and the Dow Jones Industrial Average dropped almost 300 points, or more than 1 percent. Strong
retail sales figures did little to mollify investors, as Macy’s Inc. plummeted 12 percent, the most since May 2017, despite beating expectations. Tencent’s first profit decline in at least a decade rattled emerging-market equities and made the Nasdaq 100 Index the worst performer among US benchmarks.
“Tech stocks are pulling the markets lower,†said Naeem Aslam, chief market analyst at TF Global Markets UK in London. “We are seeing investors becoming more concerned about the geopolitics.â€
Tesla Inc. was down more than 4 percent after a report that the Securities and Exchange Commission sent subpoenas
to the company as part of an investigation into the its privatisation plans and Elon Musk’s comments about funding.
Raw-materials producers dragged European shares down as copper and zinc sank to the lowest in more than a year. In Turkey, the lira gained after
the nation’s banking regulator moved to deter short-selling in the currency.
While the nation’s assets stabilised, other emerging-market currencies continued to buckle as President Recep Tayyip Erdogan intensified a diplomatic feud with his US counterpart Donald Trump with a spate of new import tariffs.
With the bull market in American stocks just one week away from becoming the longest in history, investors have become increasingly cautious amid lingering trade tensions between China and the US. Markets have been rocked over the past week as turmoil in Turkey weighed on sentiment across many emerging- and developed-nation assets. The country announced an additional tax on imports of a broad range of American goods, signalling its dispute with the US will continue.
“I think we have not seen the worst of it yet,†Peter Tchir, head of macro strategy at Academy Securities, said on Bloomberg Television.
“You’ve only started to see a knock-on effect. I think this is truly the eye of the storm and we are going to get another round of emerging-market weakness.†Elsewhere, Hong Kong intervened to defend its peg to the dollar for the first time in three months after the local currency fell to the weak end of its trading band. Oil fell on inventory increases and as Libya’s output climbed. Several markets, including Poland and India, were closed for a holiday.
Earnings are due this week from companies including Maersk, Cisco, Walmart, and Carlsberg.
The S&P 500 was down 1.1 percent to 2,809.11 in New York, its biggest decline since June. The Stoxx Europe 600 Index decreased 1.5 percent to the lowest in a more than a month. The MSCI All-Country World Index dipped 1.3 percent to the lowest in five weeks. The MSCI Emerging Market Index fell 2.1 percent, reaching the lowest since July 2017.
The Bloomberg Dollar Spot Index rose 0.3 percent to the highest since June 2017. The yield on 10-year Treasuries declined five basis points to 2.8479 percent, the lowest in a month. Gold declined 1.2 percent to $1,180.09 an ounce.