Global Stocks Slip as Bond Yields Climb and Oil Prices Fall

NEW YORK/ LONDON: On Monday, MSCI's global equities index declined due to fresh uncertainty regarding tariffs, while oil prices dropped amid expected production increases and U.S. bond yields climbed. U.S. Treasury yields experienced a slight increase after data revealed that the services sector in the largest global economy stayed robust last month, with the prices paid, an indicator of inflation, reaching a two-year peak. Gold prices surged, propelled by a declining U.S. dollar and a rise in safe-haven demand ahead of the U.S. Federal Reserve's upcoming interest rate policy decision later this week. The MSCI index measuring stocks worldwide declined by 3.04 points, or 0.36 per cent, settling at 846.21 following nine consecutive sessions of increases. However, general trading was quiet due to public holidays in nations like Britain, China, and Japan. The STOXX 600 index, which encompasses all of Europe, previously closed with a gain of 0.16 per cent.

On Wall Street, all three key indexes closed down, with the S&P 500 and the Dow Jones Industrial Average ending nine consecutive sessions of gains. "Stocks are experiencing a slight pause (Monday) after a two-week upward trend from the early April lows," stated Sahak Manuelian, managing director and head of equity trading at Wedbush Securities, also noting that trading volume was low. Stocks began the day with a decline amid fresh doubts regarding U.S. President Donald Trump's trade policies, following his declaration of a 100 per cent tariff on films made outside the United States, while providing minimal details on the enforcement of the taxes. "Markets prefer stability, and investors began their Monday with increased uncertainty about the future of tariffs," stated Adam Sarhan, CEO of 50 Park Investments based in Orlando, Florida. The announcement regarding film tariffs affected the stocks of streaming companies like Netflix and Paramount Global (PARA.O).

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Sarhan stated that investors worry that additional sectors might be affected "if they realise there could be another 100 per cent or 200 per cent tax on another industry that is essential to our economy." On Sunday, Trump stated that the United States is in discussions with various nations, including China, regarding trade, emphasising that his primary focus with China is to obtain a fair agreement. Hope regarding a possible easing of trade conflicts between the United States and China has uplifted markets recently, with European stocks operating slightly under the values observed prior to Trump's significant tariff announcement on April 2 that unsettled markets. In Wall Street stocks, the Dow Jones Industrial Average decreased by 98.60 points, or 0.24 per cent, to 41,218.83, the S&P 500 declined by 36.29 points, or 0.64 per cent, to 5,650.38, and the Nasdaq Composite (.IXIC) dropped by 133.49 points, or 0.74 per cent, to 17,844.24.

In energy markets, oil prices dropped by over $1 a barrel after OPEC+ chose to accelerate oil production increases over the weekend, raising investor worries about additional supply amid uncertain demand forecasts. U.S. crude closed lower by $1.16 or 1.99  at $57.13 a barrel, while Brent finished at $60.23 per barrel, declining $1.06 or 1.73 per cent for the day. In U.S. Treasuries, the yield on the benchmark U.S. 10-year notes increased by 2.9 basis points to 4.349 per cent, up from 4.32 per cent late Friday, while the yield on the 30-year bond climbed by 4.1 basis points to 4.8356 per cent. The yield on the 2-year note, usually aligned with expectations for Fed interest rates, increased by 0.3 basis points to 3.843 per cent, up from 3.84 per cent recorded late on Friday. In precious metals, spot gold increased by 2.82 per cent to $3,331.35 per ounce. U.S. gold futures increased by 2.42 per cent to $3,310.10 per ounce.