Shares dip with pressure from technology, yields and oil fall
NEW YORK/LONDON, Aug 24 : MSCI's global equities gauge lost ground on Monday as weakness in technology stocks offset support from a dip in U.S. Treasury yields and falling oil prices.
Oil prices fell more than $2 per barrel as traders shrugged off U.S. Treasury Secretary Scott Bessent's announcement of an expansion of secondary sanctions that Washington can impose on entities and countries that maintain business ties with Iran as the U.S. significantly ratchets up economic pressure on Tehran, nearly six months into their war.
Longer-dated U.S. Treasury yields fell following a report that the Treasury Department may tap its cash account to finance increased debt buybacks. In currencies, the Canadian dollar dipped due to a looming U.S. trade war.
While most of the S&P 500's industry sectors finished Monday's session with gains, heavyweight technology led losses among the benchmark's three declining sectors, with a 1.6 per cent drop.
"Today it's a mixed bag. Technology is being dragged down by the overnight news from two key companies, but the rest of the market is reacting positively to lower oil prices and lower bond yields," said Gene Goldman, chief investment officer at Cetera, El Segundo, California.
In particular, Goldman pointed to Alibaba's launch of a $10.2 billion share sale at a steep discount to fund its AI ambitions. And South Korean shares fell after Samsung Electronics announced a $79 billion shareholder-return plan, a record amount but still smaller than what investors had expected. Earlier, South Korea's KOSPI index finished down more than 3 per cent.
Technology investors were also on edge ahead of Nvidia's quarterly financial report on Wednesday with worries about how hard it will be for the leading AI chipmaker to meet sky-high expectations.
The Dow Jones Industrial Average rose 140.15 points, or 0.26 per cent, to 53,417.16. The S&P 500 fell 21.51 points, or 0.28 per cent, to 7,652.86 and the Nasdaq Composite fell 200.26 points, or 0.76 per cent, to 25,980.19.
MSCI's gauge of stocks across the globe fell 4.58 points, or 0.40 per cent, to 1,145.23.
Earlier in the day, the pan-European STOXX 600 index ended its session little changed at 654.21.
FROM JACKSON HOLE TO TRADE WARS
Also coming up this week is Federal Reserve Chair Kevin Warsh's first speech at an annual conference in Jackson Hole. The appearance has taken on added weight as traders and analysts look for guidance about the recent jump in bond yields and for reassurance of his independence from the Trump administration.
While traders are pricing in a roughly 58 per cent probability that the Fed will hold rates steady at its September meeting, their bets that rates will not be hiked fall to 43.8 per cent for October and to 25.7 per cent for December, according to CME Group's FedWatch tool.
Meanwhile, Treasury Secretary Bessent said that the U.S. government will continue with its regularly scheduled debt auctions, including for long-dated bonds, despite its move to increase buyback sizes of 10- to 30-year securities.
In government bonds, the yield on benchmark U.S. 10-year notes fell 3.79 basis points to 4.7 per cent, from 4.738 per cent late on Friday. The 30-year bond yield fell 4.84 basis points to 5.2276 per cent.
However, the 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.4 basis points to 4.238 per cent.
U.S.-CANADIAN TRADE WAR
In currencies, the U.S. dollar advanced after hitting three-month lows last week while U.S. hostilities with Iran intensified along with U.S.-Canada trade tensions.
President Donald Trump on Monday threatened to raise U.S. tariffs on all cars, trucks and automotive parts from Canada to 50 per cent starting January 1, 2027, escalating their trade fight after negotiations collapsed on Friday. A day after the talks floundered, Canadian Prime Minister Mark Carney said on Saturday that retaliatory Canadian tariffs on U.S. goods would come into effect on September 8.
With that, the Canadian dollar weakened 0.56 per cent versus the greenback to C$1.385 per dollar.
The dollar index, which measures the greenback against a basket of currencies, including the yen and the euro, rose 0.2 per cent to 99.01, with the euro down 0.15 per cent at $1.1662.
Against the Japanese yen, the dollar strengthened 0.13 per cent to 159.13.
In energy markets, U.S. crude settled down 2.35 per cent, or $2.05, at $85.01 a barrel and Brent settled at $92.17 per barrel, down 2.35 per cent, or $2.22, on the day.
In precious metals, gold prices pushed to their highest levels in more than three months as technical buyers piled into a rally driven by the U.S. Treasury's recent buyback announcement and a weaker dollar ahead of this week's inflation data and the Jackson Hole meeting.
Spot gold rose 0.97 per cent to $4,647.29 an ounce. U.S. gold futures rose 1.01 per cent to $4,670.90 an ounce.
