NEW YORK (BLOOMBERG) - US stocks declined on news that the White House was prepared to target more Chinese technology firms in its trade wrangling with Beijing. The dollar and Treasuries held their ground after the release of meeting minutes from the Federal Reserve.
The S&P 500 remained lower, with tech shares under pressure amid the latest developments in the trade war with China. The Fed minutes put a damper on market hopes for lower interest rates this year, weighing slightly on equity markets as fed funds futures showed a slight drop in the odds for a rate cut. Energy shares slid along with crude futures after an unexpected buildup in US oil and gasoline stockpiles, while retail stocks declined on disappointing earnings from Lowe's Cos. and Nordstrom Inc.
"When the labour market keeps tightening and labor pressure keeps going up, if you're in traditional retail and you already have Amazon breathing down your neck on one side and you have wage pressure on the other, and you got - oh, by the way - a trade war, it's a tough environment for those types of companies," said Ronald Temple, co-head of multi-asset and head of US equity at Lazard Asset Management.
Debt and equity markets continue to run hot and cold as investors react to the near-daily salvos in the US-China trade conflict, trying to size up how much damage they will bring to growth and supply chains.
Retail and real estate shares led a decline in the the Stoxx Europe 600 gauge. Russia's 10-year bond yields fell to their lowest level since the emerging-market currency crisis last August, after the Finance Ministry said it would consider returning to limited bond auctions. The pound extended a decline and gilts jumped as Prime Minister Theresa May faced pressure to quit within days.
Here are some notable events coming up: Counting of votes from the Indian general elections takes place Thursday (May 23) as Prime Minister Narendra Modi attempts to secure a second term.
The European Parliament holds continent-wide elections May 23-26.
On Thursday, the ECB publishes its account of the April monetary policy decision.
And these are the main moves in markets: Stocks The S&P 500 Index fell 0.2 per cent as of 2:06 p.m. New York time.
The Stoxx Europe 600 Index dipped 0.1 per cent.
The UK's FTSE 100 Index rose 0.1 per cent The MSCI Emerging Market Index fell 0.1 per cent.
Currencies The Bloomberg Dollar Spot Index rose 0.1 per cent.
The euro fell less than 0.05 per cent to US$1.1163 (S$1.5390)
The British pound dipped 0.2 per cent to US$1.2689.
The Japanese yen advanced 0.2 per cent to 110.26 per dollar.
Bonds The yield on 10-year Treasuries fell four basis points to 2.39 per cent.
Germany's 10-year yield declined two basis points to -0.09 per cent.
Britain's 10-year yield sank seven basis points to 1.015 per cent, the biggest drop in two months.
Commodities West Texas Intermediate crude sank 3 per cent to US$61.27 a barrel.
Gold gained less than 0.05 per cent to US$1,275.08 an ounce.