Stocks sell off on U.S.-Iran crisis
U.S. stocks advanced as heavyweight technology companies led a rebound. Treasuries and the dollar dropped.
The S&P 500 rose for the third time in four sessions, erasing early losses, as investors looked past geopolitical tensions and toward the resilience of the U.S. economy. Amazon Inc. and Google-parent Alphabet Inc. paced the advance.
The risk-off rally that started Friday, sparked by the U.S.-Iran conflict, lost momentum Monday. Gold retreated from the highest in more than six years and the yen fell from a three-month high versus the dollar, while 10-year Treasury yields rose to above 1.80 per cent.
Oil also pared gains, which reached the highest since April, to trade below US$63 a barrel in New York.
“It’s wait-and-see mode here,” said Steve Chiavarone, a portfolio manager with Federated Investors. “How much, if at all, do things escalate with Iran and does it ultimately impact the global economic outlook? Right now, not so much. Could it change? Sure.”
What will be the biggest risk to markets in 2020?
The risk-off sentiment spurred by the sudden escalation of tensions in the Middle East last week ebbed Monday as investors refocused on improving trade and better economic numbers. But the uncertainty surrounding Iran’s potential reaction to the U.S. airstrike still hung over markets.
Here are some events to watch for this week:
Federal Reserve officials Richard Clarida, John Williams, James Bullard and Charles Evans speak on Thursday.
The U.S. monthly employment report is due Friday.
These are moves in major markets:
The S&P 500 Index rose 0.4 per cent as of 4 p.m. New York time.
The Nasdaq 100 rose 0.6 per cent.
The Stoxx Europe 600 Index sank 0.4 per cent.
The MSCI Asia Pacific Index fell 1.2 per cent.
The MSCI Emerging Market Index dropped 1 per cent.
The Bloomberg Dollar Spot Index declined 0.2 per cent.
The euro increased 0.3 per cent to US$1.1192.
The British pound gained 0.6 per cent to US$1.3163.
The Japanese yen fell 0.3 per cent to 108.37 per dollar.
The yield on 10-year Treasuries rose one basis point to 1.80 per cent.
The yield on two-year Treasuries increased one basis point to 1.53 per cent.
Germany’s 10-year yield sank less than one basis point to -0.28 per cent.
Britain’s 10-year yield advanced four basis points to 0.777 per cent.
West Texas Intermediate crude fell 0.5 per cent to US$62.71 a barrel.
Gold gained 1 per cent to US$1,567.60 an ounce.