Markets Wrap: Stocks Fall as Investors Digest Trade, Jobs Data

The S&P 500 fell for a fifth straight day, putting the measure on track for its steepest weekly loss since December’s sell-off. Trade angst recaptured center stage after Trump said he’d slap more tariffs on Chinese goods, adding to worries that the spat could derail the global economy. Stocks were already under pressure after investors groused that the first Federal Reserve rate cut in a decade didn’t come with assurances of further easing.

Ten-year Treasury yields held near the lowest level since 2016 after U.S. employers added

jobs generally in line with expectations and wage data showed gains. The dollar was steady against major currencies. Earlier, European and Asian stocks slumped after China pledged “countermeasures” if the U.S. steps up tariffs on its goods.

“The Fed is largely easing policy because of the possibility that trade tensions will impact the global economy and the feedback into the U.S. economy would be negative and that calculus appears to be correct,” said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. “Yesterday’s announcement of an escalation of trade tensions is the key risk to markets now that the Fed is easing monetary policy and it bears watching how far the administration will push tariffs that ultimately impact the consumer, which up to this point has been very resilient.”

The jobs report Friday added another piece to an already large puzzle that includes the Fed, earnings and trade. While China has yet to offer details on what measures it would take, the sudden escalation of the spat has put markets in a spin in an already action-packed week of corporate earnings and central-bank meetings. The developments come after the Federal Reserve chief cast doubt about a long cycle of interest-rate cuts, provoking the president’s ire and disappointing many investors.

Elsewhere, crude oil clawed back some of its 8% slide on Thursday. Gold gave up some of the previous day’s gains. Most European government bonds rose alongside the common currency. The pound drifted after a by-election loss reduced U.K. Prime Minister Boris Johnson’s House of Commons majority to a single seat.

Here are some of the key events to watch as the week unfolds:

• The U.S. July jobs report is due Friday.
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- Bloomberg