US stocks fall on Trump talk as dollar steadies

London - US stocks opened lower as the dollar stabilised from earlier losses as markets digested comments from US President Donald Trump on Wednesday denouncing the greenback’s strength and championing lower interest rates. Banking stocks led a European decline.

The S&P 500 Index opened down 0.25% at 2 339.09 Thursday, while the Dow Jones Industrial average fell 0.24% to 20 543.27. The Bloomberg Dollar Spot Index was essentially flat after falling below its 200-day moving average on Wednesday. 

US Treasury yields were steady as European bonds gained across the board. The falling yields battered lenders, who led the retreat as the Stoxx Europe 600 Index slid.

Big moves in the aftermath of Trump’s remarks, which also signaled a softening stance on China’s currency practices and took in the future of Fed chair Janet Yellen, added momentum to a jump in volatility across global stock markets. 

After weeks of relative calm, traders are attempting to get a handle on the president’s unpredictable interventions, rising geopolitical risks, the end of easy central bank cash and key elections in Europe.

Lower volumes in the shorter trading week before Easter may have compounded the swings.

“Markets look distracted by a whole bunch of contradictory bluster,” Bill Blain, a strategist at Mint Partners in London, wrote in a note. “Let’s not forget we’re facing four days of closed markets. Most institutional investors and the banks have already bedded down their positions ahead of the holidays.”

Here’s what investors are watching:

Citigroup and Wells Fargo & Co will follow JPMorgan in reporting results on Thursday as the earnings season for big banks begins.

Analysts want to hear what they have to say about the slowdown in commercial loan growth as well as the state of consumer lending amid worries over high levels of student and auto loans. Many markets will be closed tomorrow for the Easter holiday weekend.

Read our Markets Live blog here.

Here are the main moves in markets:

Currencies

The Bloomberg Dollar Spot Index was little changed, paring an earlier slide of as much as 0.3%. The yen fell 0.1% to ¥109.20/$. The euro was 0.3% lower at 1.0630, falling for the first time in four days.

Stocks

The Stoxx Europe 600 Index slid 0.4%. The Nasdaq 100 Index slipped 0.17%, while the Russell 2000 Index lost 0.27%.

Bonds

The 10-year US Treasury yield was little changed at 2.24%, after dropping six basis points to the lowest closing level since November 16 yesterday. German 10-year yields dropped two basis points to 0.18%.

Commodities

West Texas Intermediate rose 0.2% to $53.24 a barrel. It fell 0.5% on Wednesday as a government report showed US output expanded to the highest level in more than a year, countering a decline in stockpiles from a record.

Gold was up 0.88% to $1 289.30 an ounce, climbing to the highest level in five months. Iron ore futures declined 1.1%. That’s after the benchmark spot price tumbled 8.5% on Wednesday, its biggest one-day slump since March 2016.