Stocks dip as Fed meeting looms, oil climbs on geopolitical fears
By Stephen Culp NEW YORK (Reuters) - U.S. stocks ended nominally lower on Friday as investors awaited next week's Federal Reserve meeting for signs of imminent easing, while the U.S.-Iran confrontation in the Gulf of Oman added to geopolitical uncertainty, sending oil prices higher. Lingering worries over the U.S.-China trade war also weighed on investor sentiment
By Stephen Culp
NEW YORK (Reuters) - U.S. stocks ended nominally lower on Friday as investors awaited next week's Federal Reserve meeting for signs of imminent easing, while the U.S.-Iran confrontation in the Gulf of Oman added to geopolitical uncertainty, sending oil prices higher.
Lingering worries over the U.S.-China trade war also weighed on investor sentiment. Weak China data and a warning of a broad slowdown in chip demand from chipmaker Broadcom Inc were the latest signs of fallouts from the tariffs both countries have imposed.
The upcoming Fed meeting, on Tuesday and Wednesday, was seen as pivotal for Wall Street, with stocks primed for a selloff if the Fed fails to take an even more dovish tilt after policymakers' comments raised expectations for a rate cut in recent weeks.
"There's a lack of information to trade and the magnitude of the importance of the Fed next week can't be overstated, so you don't want to put any position on in front of something that has the potential to be such big news," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago
Positive U.S. retail sales data helped boost the dollar and short-term Treasury yields.
The Dow Jones Industrial Average fell 17.16 points, or 0.07%, to 26,089.61, the S&P 500 lost 4.66 points, or 0.16%, to 2,886.98 and the Nasdaq Composite dropped 40.47 points, or 0.52%, to 7,796.66.
MSCI's broad gauge of stocks across the globe shed 0.33%, while the pan-European STOXX 600 index lost 0.40%.
Attacks on two oil tankers in the Gulf of Oman lifted oil prices, although they posted a weekly loss on worries a sluggish world economy could hurt demand.
Growing worries about a U.S.-Iranian confrontation set crude prices higher. U.S. crude settled up 0.44% at $52.51 per barrel, with Brent futures gaining 1.1% to $62.01 per barrel.
China's industrial output growth came in well below expectations, slowing to a more than 17-year low, suggesting Beijing was feeling the sting of the protracted trade war with the United States.
(GRAPHIC: Rate cuts by central banks - https://tmsnrt.rs/2Igfo8O)
(GRAPHIC: Global assets in 2019 - http://tmsnrt.rs/2jvdmXl)
EYES ON NEXT WEEK'S FED MEETING
A Reuters poll showed a growing number of economists expect the Fed to cut interest rates this year, although the majority still see it holding steady.
"If they indicate they won't or that they'll wait and see, that's going to hurt," Battle, of Performance Trust Capital, said. "We're going to be on pins and needles until we get some indication from the Fed."
The dollar index climbed to its highest level in almost two weeks on Friday after the retail sales data for May eased fears that the U.S. economy is slowing sharply.
The dollar index rose 0.58%, with the euro down 0.61% to $1.1206.
The retail report also sent short-dated U.S. Treasury yields higher, flattening the yield curve.
Benchmark 10-year notes last rose 2/32 in price to yield 2.0839%, from 2.091% late on Thursday.
Gold closed lower after hitting a 14-month peak earlier in the session.
Spot gold dropped 0.1% to $1,341.23 an ounce.
(GRAPHIC: World FX rates in 2019 - http://tmsnrt.rs/2egbfVh)
(GRAPHIC: MSCI All Country World Index Market Cap - http://tmsnrt.rs/2EmTD6j)
(GRAPHIC: China trade shock interactive - https://tmsnrt.rs/2SRopIf)
(Reporting by Stephen Culp; Additional reporting by Chuck Mikolajczak, Kate Duguid, Ahmad Ghaddar and Karen Brettell in New York, Karin Strohecker, Sujata Rao and Dhara Ranasinghe in London, and Shinichi Saoshiro in Tokyo)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.