U.S. Futures Slip on Tech Tension; Dollar Rises: Markets Wrap

U.S. equity-index futures declined with stocks after President Donald Trump’s latest attack on Chinese tech companies stoked tensions with Beijing. Treasuries and the dollar rose.

Contracts on all three major American benchmarks slipped, with those on the Nasdaq 100 snapping seven days of gains. China and Hong Kong shares saw the bulk of losses in Asia, as WeChat operator Tencent Holdings Ltd. slumped more than 10% at one point. The Stoxx Europe 600 Index fluctuated before turning lower, dragged down by oil and gas companies and carmakers.

Trump signed executive orders prohibiting U.S. residents from doing any business with WeChat, TikTok or the apps’ Chinese owners as America seeks to curb China’s power in global technology. That threatens to derail this week’s rally in global shares, after better-than-forecast earnings and optimism on a coronavirus vaccine had helped a gauge of world equities to wipe out the year’s losses.

“The executive orders leveled on TikTok and the scrutiny over WeChat has opened up a most unwelcome can of worms,” said Stephen Innes, chief global markets strategist at AxiCorp. This could “be more of a signal than anything else, especially front-running the China trade talks” expected later this month, he said.

Meanwhile, concerns remain that lawmakers won’t be able to resolve differences over a new U.S. reliefpackage, with data later Friday seen showing a slowdown in jobs gains as the economic recovery sputters. The White House and congressional Democrats are up against a self-imposed Friday deadline to strike a deal.

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Elsewhere, crude oil declined, though still headed for a weekly gain. Gold retreated from a record high. Turkey’s liraslumped to a fresh record against the dollar even after the central bank spent billions to to prop it up.

These are some of the main moves in markets:

Stocks

  • The Stoxx Europe 600 Index retreated 0.4% of 10:26 a.m. in London.
  • Futures on the S&P 500 Index declined 0.5%.
  • The MSCI Asia Pacific Index fell 0.6%.
  • The MSCI Emerging Market Index dropped 0.8%.

Currencies

  • The Bloomberg Dollar Spot Index added 0.3%.
  • The euro weakened 0.4% to $1.1825.
  • The yen slipped 0.1% to 105.63 per dollar.
  • The offshore yuan retreated 0.1% to 6.9582 per dollar.

Bonds

  • The yield on 10-year Treasuries fell one basis point to 0.53%.
  • Germany’s 10-year yield was little changed at -0.53%.

Commodities

  • West Texas Intermediate crude slipped 0.9% to $41.60 a barrel.
  • Gold was at $2,059.31 an ounce, down 0.2%.

— With assistance by Jeanny Yu, and Adam Haigh

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