US stocks fell while the dollar rose in holiday-thinned trading as investors factor in one more Federal Reserve interest-rate hike following Friday’s US jobs data.
(Bloomberg) — US stocks fell while the dollar rose in holiday-thinned trading as investors factor in one more Federal Reserve interest-rate hike following Friday’s US jobs data.
The S&P 500 slumped more than 0.5%, while the Nasdaq 100 Index lost about 1%. Yields on the policy-sensitive two-year Treasury hovered around 4%.
Tesla Inc. fell after cutting prices of all models for the second time this year. Tech stocks slid on the prospect of another rate hike, while an Apple Inc. report that personal computer shipments fell sharply added to the sector slide. Pioneer Natural Resources Co. jumped after the Wall Street Journal reported that Exxon Mobil has held preliminary talks over a possible acquisition.
Trading volumes were light with markets across Europe, Hong Kong and Australia closed for Easter holidays.
On Friday, a solid US hiring report bolstered bets for another Fed rate increase. The next major data point is Wednesday’s report on consumer prices, which is expected to show a 0.4% monthly increase in core CPI.
Ian Lyngen, head of US rate strategy at BMO Capital Markets, said that the March employment numbers provide “no hurdle for the Fed” to issue a 25 basis point hike in May, although upcoming data could impact the decision.
“With the employment landscape remaining surprisingly robust despite the cumulative global policy tightening in place, the Fed’s looming rate decision will almost entirely be contingent on the March CPI report,” he wrote in a note.
Meanwhile, Bank of Japan Governor Kazuo Ueda held his first news conference since taking the new role. The Bank of Japan’s yield curve control and negative interest rates are appropriate amid the current economy, Ueda said, signaling any significant changes to its monetary policy framework may be unlikely for the time being.
The dollar rose for the third day while the yen fell. Gold slid, trading near $2,000 an ounce.
Micron Technology Inc. and Western Digital Corp. advanced after rival Samsung Electronics said on Friday that it would cut memory chip production.
Peter Tchir, head of macro research at Academy Securities Inc. said on Bloomberg Television investors are not paying attention to geopolitical risks.
“Everywhere we look I think there’s this danger, it’s growing and I’m getting a little bit nervous that a lot of investors pay lip service to geopolitical risk but then kind of push it off,” Tchir said. “We’re being a little bit too complacent on the geopolitical front.”
Key events this week:
- US wholesale inventories, Monday
- New York Fed President John Williams takes part in discussion hosted by the Economics Review at New York University, Monday
- China PPI, CPI, Tuesday
- IMF world economic outlook, global financial stability reports, Tuesday
- Chicago Fed’s Austan Goolsbee, Minneapolis Fed’s Neel Kashkari and Philadelphia Fed’s Patrick Harker speak at separate events, Tuesday
- Canada rate decision, Wednesday
- US FOMC minutes, CPI, Wednesday
- Richmond Fed’s Thomas Barkin speaks, Wednesday
- China trade, Thursday
- US PPI, initial jobless claim, Thursday
- US retail sales, business inventories, industrial production, University of Michigan consumer sentiment, Friday
- Major US banks JPMorgan Chase, Wells Fargo and Citigroup report earnings, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 fell 0.6% as of 9:30 a.m. New York time
- The Nasdaq 100 rose 0.7%
- The Dow Jones Industrial Average fell 0.3%
- The MSCI World index fell 0.2%
Currencies
- The Bloomberg Dollar Spot Index rose 0.5%
- The euro fell 0.5% to $1.0853
- The British pound fell 0.5% to $1.2357
- The Japanese yen fell 0.9% to 133.33 per dollar
Cryptocurrencies
- Bitcoin rose 0.5% to $28,268.47
- Ether fell 0.2% to $1,854.17
Bonds
- The yield on 10-year Treasuries was little changed at 3.39%
- Germany’s 10-year yield was little changed at 2.18%
- Britain’s 10-year yield was little changed at 3.43%
Commodities
- West Texas Intermediate crude fell 0.2% to $80.57 a barrel
- Gold futures fell 1% to $2,006.80 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Isabelle Lee.
(A previous version corrected the price of gold.)
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