Stocks, dollar fall amid trade tension fears

by Andre Janse van Vuuren and Anand Krishnamoorthy

Equities and the dollar slid as dialed-up trade tensions and geopolitical unease set a broader risk-off tone across markets.

S&P 500 futures slipped 0.3%, putting the US benchmark on track for its first back-to-back loss this month. The dollar fell 0.2%, nearing its weakest level since 2022. Treasury yields dropped ahead of a closely watched $22 billion auction in the 30-year tenor.

US President Donald Trump ratcheted up trade uncertainty with remarks that he intends to impose unilateral tariffs on dozens of US trading partners in the coming weeks. Separately, market jitters intensified after CBS reported that US officials have been informed Israel is fully prepared to launch an operation into Iran, prompting the US to move non-essential embassy staff out of Iraq.

The risk-off tone is stalling a rebound in US equities that had brought the S&P 500 within reach of its all-time high, even as questions persist over the economic impact of Trump’s trade agenda. While resilient earnings and limited economic fallout have supported the rally so far, traders are now looking for the next catalyst to sustain the momentum.

“S&P 500 may face a modest technical correction in the near term,” noted Linh Tran, market analyst at XS.com. It’s “a necessary pause after a strong rally, allowing the market to reassess momentum and confirm the strength of support levels.”

The dollar was already under pressure from Wednesday’s weaker-than-expected US inflation print, which helped spur traders to fully price in two quarter-point Federal Reserve interest rate cuts this year.  

“Risk sentiment remains fragile, with geopolitical tensions and lingering trade concerns weighing on the dollar,” said Shier Lee Lim, lead FX & macro strategist at Convera Singapore. 

• Agricultural trader Bunge Global SA is close to receiving a decision from Chinese antitrust authorities on its $8.2 billion purchase of Glencore Plc-backed Viterra, Bloomberg News has reported.
• Tesco Plc’s sales increased more than expected as the supermarket chain sold more premium and own-brand products.
• Airbus SE predicted the global commercial aircraft fleet will double in size to almost 50,000 planes over the next 20 years, spurred by rapid growth in markets like India.
• Oracle Corp. projected cloud infrastructure sales will jump more than 70% in the fiscal year that began this month.

 Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 fell 0.6% as of 8:34 a.m. London time
• S&P 500 futures fell 0.3%
• Nasdaq 100 futures fell 0.3%
• Futures on the Dow Jones Industrial Average fell 0.2%
• The MSCI Asia Pacific Index fell 0.1%
• The MSCI Emerging Markets Index fell 0.3%

Currencies

• The Bloomberg Dollar Spot Index fell 0.2%
• The euro rose 0.2% to $1.1514
• The Japanese yen rose 0.4% to 143.98 per dollar
• The offshore yuan rose 0.2% to 7.1834 per dollar
• The British pound was little changed at $1.3544

Cryptocurrencies

• Bitcoin fell 1.1% to $107,712.43
• Ether fell 2% to $2,759.96

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.41%
• Germany’s 10-year yield declined four basis points to 2.50%
• Britain’s 10-year yield declined three basis points to 4.52%

Commodities

• Brent crude fell 0.9% to $69.12 a barrel
• Spot gold rose 0.2% to $3,362.67 an ounce

This story was produced with the assistance of Bloomberg Automation.

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