The warning emanating from bond markets spooked investors already seeking shelter from the fraught geopolitical climate and the impact of the global trade war just a day after equities rallied on a tariff reprieve from President Donald Trump. While curve inversions normally precede economic downturns, they do not necessarily signal imminent doom.
“This is not a positive sign for the market,” Jonathan Golub, chief U.S. equity strategist at Credit Suisse, said on Bloomberg TV. “The Fed is totally empowered to change this dynamic and the market is saying they have to.”
Meanwhile, Hong Kong’s airport resumed normal operations after a chaotic night of protest in which demonstrators beat and detained two suspected infiltrators and Trump warned of Chinese troops massing on the border.
Here are the main moves in markets:
- The S&P 500 Index fell 2.9% as of 4 p.m. New York time.
- The Dow Jones Industrial Average lost 3.1% and the Nasdaq 100 fell 3.1%.
- The Stoxx Europe 600 Index fell 1.7%.
- Germany’s DAX Index sank 2%.
- The MSCI Emerging Market Index rose 0.2%.
- The MSCI Asia Pacific Index jumped 0.9%.
- The Bloomberg Dollar Spot Index rose 0.3%.
- The euro increased 0.3% to $1.1143.
- The British pound climbed 0.1% to $1.2073.
- The Japanese yen jumped 0.7% to 106.01 per dollar.
- The yield on 10-year Treasuries sank 12 basis points to 1.59%.
- The yield on two-year Treasuries declined nine basis points to 1.58%.
- The 30-year rate fell to 2.034%.
- Germany’s 10-year yield declined four basis points to -0.65%.
- Gold futures rose 0.8% to $1,526.60 an ounce.
- West Texas Intermediate crude decreased 3.5% to $55.11 a barrel.
With assistance from Adam Haigh, John Ainger and Laura Curtis.