US stocks down as Goldman says bond trading fell

London - US stocks opened lower after Goldman Sachs Group stunned Wall Street by reporting a decline in revenues from bond trading, it’s traditional strength. UK stocks also fell after British Prime Minister Theresa May announced an early general election to be held June 8.

The S&P 500 Index was down 0.28% to 2 342.64 at 14:37. The Dow Jones Industrial Average was off 0.42% to 20 552.82. Bank of America reported a 40% earnings increase, topping analysts’ estimates and offsetting some of Goldman’s weakness.

Across the Atlantic, the FTSE 100 Index dropped 2.12%, the most since last June. The pound swung from gain to loss and back again versus the dollar.

May said she was calling the election “with reluctance” but that the UK needs stability during Brexit negotiations. The unexpected gamble is likely aimed at strengthening her hand going into talks on leaving the European Union; polls show her Conservative Party is more than 20 points ahead of the main opposition.

“The markets are very uncertain and worried about various outcomes,” Dominic Konstam, Deutsche Bank’s global head of rates research, said in an interview on Bloomberg TV. “This just adds another one. We’ve got the tax reform in the US, you’ve got the French and German elections. Now you’ve got this on top.”

Geopolitics also weighed on the markets, as the standoff over North Korea’s nuclear weapons program rumbles on and the French presidential election looms. Two candidates who want to take the country out of the region’s common currency remain in contention in the most unpredictable race in recent history.

Here’s what investors are watching:

The first round of voting in France is this weekend. Final euro area inflation figures for March are out on Wednesday. Morgan Stanley will publish earnings on Wednesday. Akzo Nobel also reports then and may outline its plan to counter the $24bn takeover attempt by PPG Industries.

Here are the main moves in markets:

Stocks

The Nasdaq 100 Stock Index slipped 0.17% at the open, while the Russell 2000 Index lost 0.33%. The Stoxx Europe 600 slumped 1%, led by commodity producers.

Currencies

The Bloomberg Dollar Spot Index fell 0.26%. The pound was 1.4% higher at 1.2741. The euro rose 0.44% to $1.0690. The Turkish lira increased 0.4%, adding to Monday’s gains after Recep Tayyip Erdogan’s referendum victory.

Bonds

The yield on 10-year Treasuries fell three basis points to 2.22%. UK 10-year bond yields rose a basis point to 1.052.

Commodities

Gold tumbled 0.33% to $1 287.60 an ounce, continuing a two-day decline. West Texas Intermediate oil fell 0.4% to $52.44 a barrel, after dropping 1% on Monday.

Iron ore futures dropped 3.7%, after sliding almost 2% on Monday. The raw material for steel-making entered a bear market this month as a procession of analysts, Australia’s government and even some miners said gains were unsustainable.

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