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Mar 23, 2018

The Wall Street Journal I MoneyBeat: Stocks Can’t Escape the News on March 23,2018.

The Wall Street Journal
MoneyBeat

Stocks Can’t Escape the News

By Ben Eisen
Morning MoneyBeat is the Journal’s pre-market primer. To receive the newsletter via email, click here.
Market Snap at 03/23/2018 08:02:48 AM ET
S&P 500 Futures -0.26%
2636.25
DJIA Futures -0.43%
23861
U.S. 10 Year -3/32
2.835%
WSJ Dollar Index -0.24%
83.45
Crude Oil 0.31%
$64.5
Gold 1.11%
$1348
Europe
Asia
FTSE 100 -0.63%
Nikkei 225 -4.51%
DAX -1.65%
Hang Seng -2.45%
CAC 40 -1.5%
Shanghai -3.39%

Overnight Developments

  • The global equities swoon deepened Friday as investors dumped stocks amid escalating trade tensions. S&P 500 futures recently pointed to a 0.2% fall at the open.
  • The Stoxx Europe 600 was recently down by 1.1%.
  • Earlier, Japan’s Nikkei closed 4.5% lower, and markets in Hong Kong, South Korea, Australia and Shanghai were down by 2% to 4%.
  • The Breakfast Briefing

    Few stocks have been left unscathed this week by the news cycle.
    The S&P 500 sank 2.5%, erasing its year-to-date rise and bringing its losses so far this week to 3.9%. The Dow industrials declined 2.9%. What's most notable is that during a broad, sharp selloff, multiple narratives contributed to the decline, underscoring how the busy news cycle has rippled through markets.
    It's a sharp reversal from last year, when stocks embarked on a nearly uninterrupted rally, despite a slew of geopolitical, economic and political news events that many analysts had expected to pull stocks lower. Whereas nothing seemed to phase the market in 2017, everything seems to be phasing it in 2018.
    The most notable reason for Thursday's selloff was an announcement by the Trump administration that it would impose tariffs on tens of billions of dollars of Chinese imports and tax steel and aluminum imports. That fueled worries that a trade war could escalate, hitting U.S. manufacturers that sell goods abroad in the process.
    China retaliated with its own set of levies on about $3 billion of U.S. goods, though it said it was readying further measures.
    Boeing Co., one of the Dow's best performers over the last year and a company that generates more than half its revenue outside the U.S., sank 5.2%, subtracting 120 points from the Dow by the end of its 724-point fall. Caterpillar Inc. fell 5.7%, subtracting 61 points from the price-weighted index, while 3M Co. fell 4.7%, subtracting 76 points.
    But it wasn't just big industrial firms that pulled down the stock market. The S&P 500 information technology sector fell 2.7% amid continuing questions about whether those firms will face tougher regulation in the wake of Facebook Inc.’s user-data controversy. The sector, which accounts for more than a quarter of the broader benchmark's market value, weighed on the index.
    On top of that, bank stocks were hit by a slide in long-term bond yields, which can impact how much banks make from lending. Yields fell after the conclusion of the Federal Reserve's latest meeting, during which the central bank lifted rates and penciled in two more this year. The S&P 500 financial sector ended the day down 3.7%.
    Eight of the S&P 500's 11 sectors finished the day down by more 1%, and just one sector, utilities, finished higher. The stock market, it seems, is no longer impervious to the news cycle.
    Is the news impacting your investment decisions? Let the author know your thoughts at ben.eisen@wsj.com.