(Bloomberg) -- U.S. stocks erased losses in the final moments of trading as investors continued to gravitate to value shares.Treasury yields rose for a fifth day.
The Dow Jones Industrial Average closed positive, while the S&P 500 was little changed and the Nasdaq ended in negative territory. The Dow had briefly turned up midday following a report that China is ready to buy more U.S. agricultural products.
“That’s the tug of war that’s going on right now,” said Matt Maley, an equity strategist at Miller Tabak & Co. “It’s between monetary policy and the trade war.”
Areas of the market that were previously this year’s best performers fell the most. The opposite was true, too, with energy stocks gaining and small caps outperforming for a second day.
“The rotation from growth to value started a couple of weeks ago, but was out-sized yesterday,” said Michael O’Rourke, JonesTrading’s chief market strategist. “That caught people offside so they need to de-risk more until the situation stabilizes.”
The pound fluctuated as embattled British Prime Minister Boris Johnson insisted he won’t ask for another Brexit delay, while U.K. wage and unemployment data beat estimates. Most euro-zone sovereign bonds nudged lower as European Central Bank officials prepare to meet.
The recent pullback in the bond rally “is a correction to an outsized move in yields during August, not a turn in the trend,” Kit Juckes, chief global FX strategist at Societe Generale SA, wrote in his daily note. “Last Friday’s U.S. labor market data show, clearly enough for me, that the U.S. economy is slowing slowly but steadily as the global trade slowdown infects it.”
Investors are awaiting the ECB’s policy decisions on Thursday and those next week by the Federal Reserve and Bank of England as they assess how much monetary easing may be looming.
Elsewhere, oil plunged after President Donald Trump fired one of his most hawkish advisers. Futures fell as much as 1% after Trump announced that National Security Advisor John Bolton was out.
Here are some key events coming up this week:
OPEC’s monthly oil market report, which includes demand forecasts and production estimates, is due Wednesday.The ECB policy meeting Thursday is widely expected to see a cut to interest rates and a review of all options, including QE. Policy makers will also publish forecasts for growth and inflation. ECB President Mario Draghi will hold a press conference.U.S. data for August is due on producer prices Wednesday, and CPI Thursday.
These are the main moves in markets:
--With assistance from Lu Wang.
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