U.S. stocks fell in a volatile session as the fate of a trade deal between Washington and Beijing hung in the balance. Stocks finished well off of their lows, paring losses after President Trump said it was still possible for the U.S. and China to come together on a trade deal this week. The Dow Jones Industrial Average had slid nearly 450 points earlier in the session amid reports that the U.S. and China were still far away from an agreement heading into negotiations. The back-and-forth in markets showed investors struggling to make sense of whether the two nations, which had appeared close to finalizing a deal just a week ago, were in danger of having negotiations collapse. U.S. stocks remain up by double-digit percentages this year. But many observers say much of the gains have been driven by assumptions that the White House and Beijing would ultimately carve out a trade agreement. Earlier in the day, an end-of-day downdraft in the U.S., which wiped out its gains from Wednesday carried into Asia, resulting in declines of at least 1% outside of Southeast Asia and Down Under before the start of the latest U.S.-China trade talks.
Meanwhile, gold futures ended higher as investors braced for an intensifying Sino-U.S. trade conflict, which could provide a lift to bullion amid markets stricken by international trade fears. The precious metal traded higher “with news flow on the trade situation favoring uncertainty and the dollar posting very minimal weakness,” said analysts at Zaner Metals. Gold for June delivery gained $3.80, or 0.3%, to settle at $1,285.20 an ounce, recovering much of its $4.20, or 0.3%, loss from the previous session. The precious metal posted its fourth gain in five sessions, according to FactSet data, putting it on track for a weekly rise of about 0.3% based on last Friday’s settlement.
Iron Ore: 91.79s + 0.22 (Contract)
U.S. crude-oil prices declined, while global benchmark prices ended a few pennies higher, with escalation in the Sino-American trade spat raising the potential to dent energy demand. Those concerns have more than offset the price-supportive weekly decline in U.S. crude inventories reported Wednesday, though traders continue to keep watch on growing tensions between the U.S. and Iran, which raises the threat of disruptions to Middle East output. West Texas Intermediate crude for June delivery fell 42 cents, or 0.7%, to settle at $61.70 a barrel on the New York Mercantile Exchange, after a 1.2% rise a day earlier. Prices were on track for a weekly loss of 0.4%. Global benchmark July Brent crude added 2 cents, or 0.03%, to end at $70.39 a barrel on ICE Futures Europe. The contract was headed for a weekly decline of about 0.6%.
The Chinese yuan slumped to its lowest level since early 2019 after President Donald Trump accused China of backtracking on previous commitments in trade negotiations, escalating the conflict between the two countries. The offshore yuan fell to its lowest level since Jan.1 to 6.8634 and in doing so, dropped below its 200-day moving average. However, in afternoon trade, the yuan clawed back some losses after Trump said he’d be having some dialogue with his Chinese counterpart in the near future. The greenback is trading marginally lower against its closest rivals. The ICE Dollar Index, which measures the buck’s strength versus six trading partners, was down 0.2% at 97.399. The pound was trading at $1.3024 compared with $1.3007, while the euro rose to $1.1225, compared with $1.1193.
Korea’s benchmark skidded 3%, its worst day in seven months, while Hong Kong indexes were down 2%. The Philippines was off similarly after Wednesday’s end-of day spike higher. But Southeast Asia markets were off about 0.5%. Shares across Asia fell, with Chinese A-shares down 1.5% in Shanghai and the Hang Seng in Hong Kong 2.25% lower. Meanwhile, Indian shares logged one of the smallest declines in Asia, helped by a recovery from session lows in the last 1 1/2 hours, led by banking and financial stocks. The S&P BSE Sensex ended down 0.6% at 37558.91 with 11/30 constituents ending higher.