U.S. stocks slumped, joining a global decline as a new variant of the coronavirus in the U.K. and a wave of lockdowns and travel restrictions damped spirits.

The S&P 500 Index dipped about 0.4 per cent, dragged lower by losses for Tesla Inc., which fell more than 6 per cent on its first day after being added to the U.S. benchmark. The Dow Jones Industrial Average eked out a gain as Goldman Sachs Group Inc. rallied after regulators approved a stock buyback. The yield on 10-year Treasuries retreated and the dollar climbed.

The weakness in U.S. markets was minor compared to the rout seen in Europe, where the Stoxx 600 Index slumped the most since October as Italy, the Netherlands, Belgium and France closed their borders to the U.K. Travel and leisure stocks were hard hit.

Bulls did have some reason for optimism, including progress on a US$900 billion U.S. economic aid package. Pfizer Inc. and BioNTech SE’s COVID-19 vaccine also won the backing of a key European review panel, and a first wave of inoculations continued in the U.S.

Despite the positive developments, the emergence of the variant coronavirus strain in Britain put a damper on the return-to-work trade that’s lately taken hold. After global equities reached a record last week, traders pulled back to monitor the latest virus news.

“Fiscal stimulus is clearly fading as a catalyst, with COVID trends dictating the direction of markets,” said Emily Roland, the co-chief investment strategist at John Hancock Investment Management. “Risk assets had been shrugging off worsening virus trends, but are now showing some signs of vulnerability.”

The pound pared losses as U.K. Prime Minister Boris Johnson offered a fresh proposal to secure an 11th-hour trade deal with the European Union. Crude oil tumbled.

Here are some key events coming up:

  • EIA crude oil inventory report is due Wednesday.
  • U.S. jobless claims, durables, personal income data comes Wednesday.
  • U.S. bond and stock trading and markets in other parts of the world will shut early on Thursday for the Christmas holidays. Most global markets are shut Friday.

These are the main moves in markets:

Stocks

  • The S&P 500 Index retreated 0.4 per cent as of 4 p.m. New York time.
  • The Stoxx Europe 600 Index slumped 2.3 per cent.
  • The MSCI Asia Pacific Index declined 0.4 per cent.
  • The MSCI Emerging Market Index dropped 0.9 per cent.

Currencies

  • The Bloomberg Dollar Spot Index rose 0.2 per cent.
  • The euro decreased 0.2 per cent to US$1.2235.
  • The British pound decreased 0.5 per cent to US$1.3454.
  • The Japanese yen fell less than 0.1 per cent to 103.34 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased one basis point to 0.94 per cent.
  • Germany’s 10-year yield decreased one basis point to -0.58 per cent.
  • Britain’s 10-year yield decreased four basis points to 0.20 per cent.

Commodities

  • West Texas Intermediate crude sank 2.8 per cent to US$47.74 a barrel.
  • Gold fell 0.2 per cent to US$1,877.11 an ounce.

--With assistance from Adam Haigh, Anchalee Worrachate, Cecile Gutscher, Yakob Peterseil and Sophie Caronello.