Stocks in Europe headed lower along with US index futures as Chinese state media appeared to signal a tougher line on the trade dispute. The dollar edged higher and Treasury yields were steady.
Real estate companies and financial-services shares led the decline in the Stoxx Europe 600 Index, while contracts on the S&P 500 fell. China’s benchmark equity gauge tumbled 2.5% after local media said the country may have no interest in continuing trade talks with the U.S. for now. The yuan, already trading at five-month lows, dropped further. Japanese shares advanced, and stocks fell in South Korea and Hong Kong. Yields on Spanish 10-year debt fell to a record as bonds across the euro region firmed.
Traders are reassessing prospects for a trade deal after commentary on the blog Taoran Notes, which was carried by state-run Xinhua News Agency and the People’s Daily, the Communist Party’s mouthpiece, accused the US of playing “tricks to disrupt the atmosphere.” Indications that the talks are paused will focus attention on the next opportunity for President’s Xi Jinping and Donald Trump to meet -- at the Group of Twenty meeting in Japan next month.
Meanwhile, iron ore rose to the highest level in almost five years, and crude oil gained. The pound weakened as UK Prime Minister Theresa May agreed to set a timeline to quit. MSCI’s gauge of emerging-market stocks fell to its lowest since January. Bitcoin slumped as much as 14%, before paring losses as this month’s surge for cryptocurrencies was tested.