US stocks pare losses as investors gauge trade risks

Bloomberg

US stocks were lower but regained some of their early losses, as investors assessed fears of increasing trade tensions around the world. The dollar climbed, roiling emerging markets, while oil retreated from its highest level since 2014 following President Donald Trump’s call for Saudi Arabia to increase production.
The S&P 500 Index was down roughly 0.3 percent after falling as much as 0.7 percent, led by weakness in energy and auto shares, which weighed on the Dow Jones Industrial Average as well. On Friday, the S&P 500 capped the second quarter with its third straight monthly gain.
“Trade and tariff tensions continued to weigh on global equities as well as emerging market currencies,” John Stoltzfus, the chief investment strategist at Oppenheimer & Co., wrote in a note.
Emerging-market stocks retreated, giving up almost half of Friday’s gain, while developing-nation currencies also fell.
Mexico’s peso reversed gains following the country’s presidential elections. Earlier, benchmarks in Japan, China and South Korea tumbled. The MSCI Asia Pacific Index sank to its lowest level since in 10 months.
Trade-war jitters, political risk in Europe and divergence in monetary policy across the globe remain some of the key
issues worrying investors. Britain’s pound declined in yet another big week for Brexit, and the euro came under pressure as tensions deepened in the German coalition. In China, weaker-than-expected manufacturing data for June added to concern that the country’s growth is softening, while in Japan confidence among large manufacturers slipped during the second quarter.
The Reserve Bank of Australia has a policy decision on Tuesday. Federal Reserve releases minutes of its June 12-13 meeting, when FOMC policy makers raised the benchmark rate a quarter point for the second time this year and lifted the median forecast to four total increases in 2018.
On Friday, the US is scheduled to impose tariffs on $34 billion of Chinese goods. Beijing has said it will slap tariffs on an equal value on US exports including agricultural and auto exports.
The S&P 500 was down 0.2 percent to 2,711.22 in New York. The Stoxx Europe 600 Index fell 0.7 percent, climbing back from an earlier 1.2 percent decline. The MSCI All-Country World Index dipped 0.8 percent. The MSCI Emerging Market Index decreased 1.1 percent.
The Bloomberg Dollar Spot Index increased 0.5 percent. The euro declined 0.6 percent to $1.1611. The British pound fell 0.5 percent to $1.3136.
The yield on 10-year Treasuries was little changed at 2.8565 percent. Germany’s 10-year yield rose one basis point to 0.308 percent. Britain’s 10-year yield declined one basis point to 1.265 percent.
The Bloomberg Commodity Index declined 1.4 percent, the largest fall in a week. West Texas Intermediate crude fell 0.6 percent to $73.68 a barrel, the first retreat in a week.
Gold dipped 0.4 percent to $1,247.21 an ounce.