Stocks Tumble as Selloff Deepens; Treasuries Drop: Markets Wrap

The global equity rout extended on Tuesday as first Asian and then European markets tumbled, sending a gauge of world stocks toward the biggest three-day slide since 2015. U.S. futures bucked the trend, however, while Treasuries dropped and the dollar was steady.

The Stoxx Europe 600 Index slumped the most since June 2016, with every industry sector falling as much as 2 percent. Japan’s Nikkei entered a correction as most of the shares on the 1,000-plus member MSCI Asia Pacific Index declined. Amid the sea of red, some safe-haven assets, including gold and European bonds, traded higher. Futures for both the S&P 500 and the Dow Jones started on the back foot but clawed their way into the green.

Terminal users can read more in our live blog on the selloff.

“How far it goes down? You tell me,” Steven Wieting, global chief investment strategist at Citigroup Inc., said on Bloomberg TV. “But this speed of decline -- you cannot keep doing this day after day after day without finding some sort of bottom rather quickly.” Wieting said he anticipates that markets will stay volatile for a while.
Many finance professionals were left scratching their heads to explain the severity of the moves in a short space of time. Anxiety was building about the outlook for monetary policy prior to Monday’s rout, with equities being tested by the surge in bond yields. Global shares had just last month risen to record highs on optimism for expanding profits and economic growth.

“I actually think there’s buying opportunities, maybe not today, but through this week as this sell-off exacerbates,” said Sean Fenton, a portfolio manager who oversees about A$1 billion ($788 million) at Tribeca Investment Partners in Sydney.

The Stoxx Europe 600 Index decreased 2.2 percent as of 8:25 a.m. London time, hitting the lowest in more than five months with its seventh consecutive decline and the largest dip in more than 19 months.
Futures on the S&P 500 Index rose 0.8 percent, the biggest advance in more than a week.
The MSCI Asia Pacific Index sank 3.5 percent on the largest tumble in more than 19 months.
The U.K.’s FTSE 100 Index dipped 2.2 percent, reaching the lowest in almost 10 months on its sixth consecutive decline and the biggest decrease in almost 10 months.
The MSCI Emerging Market Index sank 3 percent to the lowest in five weeks on the largest tumble in more than 19 months.