US stocks turned lower after political wrangling in Washington raised the specter of a government shutdown, while Russian President Vladimir Putin warned tensions in Korea were rising. The euro weakened after the European Central Bank signaled its commitment to stimulus even as the region’s economy firms.
The S&P 500 Index gave up gains sparked by corporate results as a flurry of political headlines led to a rise in volatility. Energy producers tumbled after crude slid below $49 a barrel on concern over a supply glut. The Mexican peso and Canadian dollar advanced amid mixed signals from the White House on Nafta. European stocks fell as investors absorbed corporate earnings.
Politics remained in focus this week as the government seeks a continuing resolution to keep making payments that will avoid a shutdown. House Democrats threatened to not vote on one if Republicans bring a revised health bill up for consideration. The Trump administration has delivered a whirlwind of policy speculation all week as it heads for its 100th day in office.
ECB President Mario Draghi showed growing enthusiasm about the state of the euro-area economy, while cautioning that inflation pressures remain too weak to contemplate paring back stimulus.
US GDP is due Friday. It’s projected to show the economy expanded at a 1% annualized rate in the first quarter, the weakest pace in a year.
Here are the main moves in markets:
Stocks
The S&P 500 Index fell 0.1 percent to 2,384.29 at 10:58 a.m. in New York. PayPal jumped and Under Armour Inc. surged amid earnings announcements. Energy shares lost 1.8 percent. The Stoxx Europe 600 Index slipped 0.3 percent after climbing for six straight sessions to the highest level since August 2015. Deutsche Bank dropped 4.3 percent after debt and equity trading missed estimated in the first quarter. Tokyo stocks fell for the first time in six days and the yen slipped. The Bank of Japan kept its policies unchanged while lowering its inflation forecast, underscoring that any exit from its monetary easing remains far away.
Currencies
The Bloomberg Dollar Spot Index added 0.1 percent, after increasing 0.3 percent on Wednesday. The euro dropped 0.2 percent to $1.0884, while the pound strengthened 0.4 percent. The Mexican peso jumped 0.7 percent after tumbling 1.7 percent on Wednesday. The Canadian dollar rose 0.4 percent, after a four-day selloff. The yen slid 0.3 percent to 111.39 per dollar
Bonds
The yield on 10-year Treasuries was steady at 2.31 percent. The rate fell three basis points to 2.30 percent on Wednesday, after climbing for five straight sessions. German benchmark yields were little changed at 0.35 percent.
Commodities
Gold resumed losses, with the spot price dropping 0.4 percent to $1,264.59 an ounce. Oil slumped 1.1 percent to $49.07 a barrel, as investors weighed expanding U.S. crude production against a drop in bloated inventories and as Libya reopened its biggest field.