(Bloomberg) -- U.S. stocks fell from records, Treasuries sank and the dollar jumped after a strong monthly jobs report clouded the case for Federal Reserve rate cuts.
The S&P 500 Index slumped after hiring rebounded in June in a sign of labor-market strength that may ease calls for a rate cut. Equities pared declines as banks advanced after the 10-year Treasury yield retook 2% and two-year rates hit 1.85%. The dollar surged versus major peers. Gold dropped below $1,400 an ounce. Trading in S&P 500 stocks was 28% below the 30-day average at this time of day.
The latest labor report delivered signs that the economy remains on track, countering some recent data that showed weakness in manufacturing. Stocks had rallied to records and bonds surged on market expectations that the central bank will lower interest rates by at least a quarter percentage point at its July meeting, though fed fund futures showed traders trimming the amount of easing they expect.
“The positive numbers for the labor markets have given investors a bit of a conundrum as continuing strength in employment should support earnings while at the same time they make a FOMC cut less likely,” said Chris Gaffney, president of world markets at TIAA Bank. “Very thin markets due to the holiday weekend have also contributed to some of the volatility.”
Elsewhere, the euro declined after German factory orders came in far weaker than expected, with most European bonds edging down. Earlier, equity benchmarks in Japan, China and South Korea rose along with Australian stocks. Iron-ore prices tumbled after China’s largest steel-industry group urged officials to maintain order after the commodity’s recent surge to a five-year high.
Here are the main moves in markets:
Stocks
The S&P 500 Index fell 0.3% as of 2:29 p.m. New York time.The Stoxx Europe 600 Index sank 0.7%, the biggest dip in more than a month.The MSCI Asia Pacific Index declined 0.1%.The MSCI Emerging Market Index decreased 0.5%.
Currencies
The Bloomberg Dollar Spot Index gained 0.5%.The euro decreased 0.2% to $1.1262, the weakest in two weeks.The British pound fell 0.2% to $1.2557, the weakest in more than two weeks.The Japanese yen dipped 0.3% to 108.11 per dollar.
Bonds
The yield on 10-year Treasuries climbed eight basis points to 2.03%.The two-year rate jumped nine basis points to 1.85%.Germany’s 10-year yield rose one basis point to -0.39%.
Commodities
Gold futures fell 1.7% to $1,396.90 an ounce.West Texas Intermediate crude fell 0.7% to $56.91 a barrel.Iron ore sank 5.8% to $107.70 per metric ton, the largest tumble in more than two years.
--With assistance from Yakob Peterseil and Laura Curtis.
To contact the reporters on this story: Olivia Rinaldi in New York at orinaldi1@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, ;Samuel Potter at spotter33@bloomberg.net, Robert Brand
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https://finance.yahoo.com/news/asia-stocks-set-muted-start-222654611.html
2019-07-05 18:30:00Z
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