U.S. equities declined on the final trading day of a tumultuous month as consumer sentiment slid. Treasuries stayed lower after a key measure of inflation came in as expected, while the euro fell to a two-year low against the dollar.

The S&P 500 edged lower after rallying Thursday on a pause in trade threats between the U.S. and China. Still, tariff deadlines loom over the U.S. holiday weekend and a hurricane is bearing down on Florida, threatening businesses like amusement park operators and cruise lines. Trading volume in the S&P was about 30 per cent below average.

Data on the world’s largest economy showed personal spending accelerated in July, exceeding forecasts. Household consumption remained solid at the start of the third quarter, but the University of Michigan consumer sentiment index dropped to its lowest since October 2016. The Federal Reserve’s preferred measure of underlying inflation continues to fall short of its goal.

“The U.S. consumer is strong, but if they lose confidence and slow their spending that would be negative for the U.S. picture, which is currently the outlier -- remaining strong while the rest of the world is slowing,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

Markets this month have been convulsed by every apparent bust-up and breakthrough in the showdown between the world’s two largest economies. But while new tariffs kick in Sunday, Beijing has indicated it won’t immediately retaliate, helping steady investor nerves.

The Stoxx Europe 600 Index rose for a second day. Equity benchmarks in Tokyo and Seoul led gains across most of Asia, though shares in Hong Kong lagged the rally after news broke that prominent protest figures were arrested, and Shanghai’s index closed lower for the fourth time this week.

The pound slipped as lawmakers lost a bid to block Prime Minister Boris Johnson’s plan to suspend parliament. The euro dropped below US$1.10 for the first time in since May 2017 as traders closed out hedges at month’s end and data showed inflation remained stubbornly low.

Bunds reversed early losses while Italian bonds declined as coalition talks faltered. Argentina’s bonds extended declines after S&P Global Ratings cut the country’s foreign- and local-currency credit ratings. West Texas crude fell the most in two weeks and gold fell.

Here are the main moves in markets:

Stocks

The S&P 500 Index fell 0.2 per cent as of 3:03 p.m. New York time.
The Stoxx Europe 600 Index climbed 0.7 per cent.
The U.K.’s FTSE 100 Index rose 0.3 per cent.
Germany’s DAX Index increased 0.8 per cent.
The MSCI Emerging Markets Index climbed 1.4 per cent, a three-week high.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 per cent to a two-year high.
The euro decreased 0.7 per cent to US$1.098.
The British pound declined 0.2 per cent to US$1.2155.
The Japanese yen increased 0.2 per cent to 106.27 per dollar.

Bonds

The yield on 10-year Treasuries gained one basis point to 1.50 per cent.
The yield on two-year Treasuries fell one basis point to 1.51 per cent.
Britain’s 10-year yield climbed four basis points to 0.479 per cent.
Germany’s 10-year yield declined one basis point to -0.70 per cent.

Commodities

West Texas Intermediate crude fell 2.9 per cent to US$55.08 a barrel.
Gold fell 0.1 per cent to US$1,525.32 an ounce.