Stocks pulled back from the rally that had pushed equities to records as oil jumped on a forecast for rising demand.
The S&P 500 Index slipped and the Stoxx Europe 600 headed for the first drop in six days after US and global benchmarks closed at all-time highs a day earlier. Miners led the decline in Europe as the price of industrial metals retreated. Oil advanced to a five-month high after the International Energy Agency said demand will climb this year by the most since 2015. Treasuries and the dollar were little changed after US data showing subdued price pressures.
Record stock prices are provoking concern in some corners of the market, with the number of investors seeking protection from a possible plunge jumping. Leon Cooperman, the billionaire founder of hedge fund Omega Advisors, says a correction could start “very soon.”
“Central banks will tread carefully and the direct impact of global tapering on the real economy will likely be modest,” Citigroup economists led by Ebrahim Rahbari wrote in a report. “But there is a material risk in our view that major asset price corrections could be triggered by this global tapering.”
Geopolitical concerns also continue to linger. North Korea said it will accelerate its plans to acquire a nuclear weapon that can strike the US homeland in its first response to fresh United Nations sanctions. Earlier, Treasury Secretary Steven Mnuchin warned the US may impose additional sanctions on China, potentially cutting off access to the American financial system, if it doesn’t follow through on the new UN restrictions.
US consumer-price data on Thursday will be watched by investors for clues on the Fed’s policy-tightening path. The Bank of England will almost certainly leave policy unchanged on Thursday. Also scheduled this week is data on China’s August industrial production, retail sales and fixed-asset investment. Australia releases jobs numbers on Thursday.
The S&P 500 Index fell 0.2 percent as of 9.31 am New York time. The Stoxx Europe 600 Index dipped 0.1 percent the first retreat in more than a week on a closing basis. The MSCI All-Country World Index slipped less than 0.1 percent. The MSCI Emerging Market Index declined 0.3 percent. The UK’s FTSE 100 Index sank 0.3 percent.
The Bloomberg Dollar Spot Index was little changed. The euro fell 0.1 percent to $1.1953. The British pound weakened 0.2 percent to $1.361.
The yield on 10-year Treasuries was little changed at 2.17 percent. Germany’s 10-year yield fell less than one basis point to 0.39 percent. Britain’s 10-year yield rose one basis point to 1.14 percent.
Gold slipped 0.1 percent to $1,329.80 an ounce. West Texas Intermediate crude increased 0.9 percent to $48.64 a barrel. Copper declined 1.7 percent to $2.98 a pound, the lowest in more than three weeks.
The Topix index rose 0.6 percent at the close in Tokyo. Australia’s S&P/ASX 200 Index was little changed and the Kospi index in Seoul finished the session 0.2 percent lower. Hong Kong’s Hang Seng Index fell 0.3 percent, while the Shanghai Composite Index added 0.1 percent. The Japanese yen was little changed at 110.15 per dollar.