Equity benchmarks slipped from near record levels, technology shares pacing declines. Commodity producers also retreated, as crude fell to a seven-month low and gold slid more than 1.5 percent. European stocks dropped to levels last seen in April. The greenback strengthened and 10-year Treasury yields climbed as the Fed suggested the strength of the labor market will ultimately prevail over weakness in inflation. Emerging-market equities tumbled more than 1 percent, according to Bloomberg.
Investors resumed selling the major technology shares that have contributed most to equity records this year, as the threat of higher interest rates prompted a shift from growth into value shares. Softening commodity prices did little bolster arguments that inflation will pick up the pace, even as the U.S. labor market remains on strong footing -- raising the specter that central bank officials made a policy error.
Meanwhile, Washington remained in focus as the special counsel investigating Russia’s interference in the 2016 election was said to be planning to interview two top U.S. intelligence officials about whether President Donald Trump sought their help to get the FBI to back off a related probe of former National Security Adviser Michael Flynn.
Here are the key remaining events investors will be watching this week:
- The Bank of Japan concludes a two-day meeting on Friday. While economists don’t expect any significant changes to monetary policy, they will parse the BOJ’s statement and Governor Haruhiko Kuroda’s comments for clues to the outlook for inflation.
Here are the major movers:
Stocks
- The S&P 500 Index fell 0.2 percent to 2,432.49 at 4 p.m. in New York, paring losses that reached 0.8 percent.
- Tech shares in the measure lost 0.5 percent, while bond proxies from real estate to utilities led gains.
- The tech-heavy Nasdaq indexes retreated at least 0.4 percent. The Dow Jones Industrial Average slipped 0.1 percent from a fresh record.
- The Stoxx Europe 600 Index retreated 0.4 percent.
- Emerging-market equities tumbled 1.2 percent.
Currencies
- The Bloomberg Dollar Spot Index rose 0.6 percent following three days of losses.
- The yen was 0.7 percent weaker at 110.34 per dollar after climbing 0.5 percent Wednesday.
- The British pound weakened 0.1 percent to $1.2741 and the euro retreated 0.6 percent to $1.1151.
Bonds
- The yield on 10-year Treasury notes rose three basis points to 2.16 percent, after dropping 8.5 basis points Wednesday to 2.13 percent, the lowest level since November.
- European bonds tracked the move in Treasuries on Wednesday, with the yield on benchmark U.K. bonds rising 11 basis points to 1.03 percent and those of French and German peers increasing six basis points.
Commodities
- West Texas crude futures fell 0.6 percent to settle at $44.46 a barrel, the lowest in seven months. It tumbled 3.7 percent in the previous session after data showed U.S. gasoline supplies unexpectedly rose for a second week.
- Gold futures sank 1.7 percent to close at $1,254.60 an ounce, notching the biggest drop since Dec. 15.
- Copper fell 0.7 percent to settle at $5,661 a ton on the London Metal Exchange, in a fourth straight decline, longest stretch of losses since March 9.