NEW YORK: A surge in US government bond yields to their highest level in almost seven years sent Wall Street shares sliding on Tuesday after strong retail sales data stoked inflation concerns and investors fretted about looming trade talks between the United States and China.
All three major US stock indexes closed down, with the S&P 500 ending a four-day winning streak and the Dow Jones Industrial Average posting its first loss in eight sessions.
The yield on 10-year US Treasury notes jumped to its highest level since July 2011, suggesting an uptick in inflation and sending the dollar index to its highest close in 2018, raising expectations for further interest rate hikes from the Federal Reserve.
"A combination of firm growth and higher interest rates is unnerving," said Anthony Chan, chief economist for Chase in New York. "A stronger dollar means downward pressure. ... A creeping up of these things continues to keep the market nervous."
Core April retail sales - which excludes gasoline, automobiles, building materials and food services - rose at a brisker 0.4 percent monthly pace over March, as consumer spending is quickening its pace after a first-quarter slowdown.
Investors also remain preoccupied by the run-up to high-level talks between China and the United States set to commence this week in Washington. US ambassador to China Terry Branstad said the two countries remain "very far apart" regarding a tariff resolution, after which White House economic adviser Larry Kudlow told Politico he supports efforts to reach an agreement.
The Dow Jones Industrial Average fell 193 points, or 0.78 per cent, to 24,706.41, the S&P 500 lost 18.68 points, or 0.68 per cent, to 2,711.45 and the Nasdaq Composite dropped 59.69 points, or 0.81 per cent, to 7,351.63.
LONDON: Britain's top share index hit a four-month high on Tuesday as oil majors rallied, though Vodafone's shares struggled after the world's second largest mobile operator said its boss was leaving.
The FTSE blue-chip benchmark ended the day up 0.2 per cent, while Vodafone's shares fell 4.3 per cent, the worst-performing on the index.
In Germany the DAX 30 index was down 0.06 per cent, while France's CAC 40 was up 0.23 per cent.
Vodafone, which also announced its full-year results, said CEO Vittorio Colao, who spent 10 years reshaping the group into a digital communications powerhouse, would be replaced by its current finance director.
"With positive results across the board, one would expect markets to react by buying the shares, and yet investors are clearly taking a dimmer view about the company's prospects with the CEO of 10 years on his way out," said Accendo Markets analyst Artjom Hatsaturjants.
"After 10 years of stability under Colao, Vodafone is potentially setting sail into uncharted waters," Hatsaturjants added.
TOKYO: Asian stocks pulled back on Tuesday, as investors turned cautious after soft Chinese economic data and awaited fresh developments on US-China trade talks and North Korea.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8 per cent after rising the previous day to its highest since late March. The index had rallied for three straight sessions prior to Tuesday.
Japan's Nikkei dipped 0.2 per cent, with its surge to a three-month peak bogging down.
"The markets appear to be taking a breather after their recent surge, awaiting fresh developments in matters such as US-China trade issues and Washington's upcoming summit with North Korea," said Yoshinori Shigemi, global markets strategist at JP Morgan Asset Management in Tokyo.
WELLINGTON: On Tuesday, New Zealand's S&P/NZX 50 index fell 0.05 per cent, to 8,708.78.