# Stocks tread water as gold, oil declines spook sentiment
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-08-09
Category: INVESTING
Category URL: https://financedigest.com/category/investing
Meta Title: Global Shares Trade Sideways Amid Concerns Over Delta
Meta Description: Stay updated on global stock market movements as concerns over Covid Delta variant and falling gold/oil prices impact sentiment. Read more here.
URL: https://financedigest.com/stocks-tread-water-as-gold-oil-declines-spook-sentimenthtml

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By Matt Scuffham and Ritvik Carvalho

NEW YORK/LONDON (Reuters) -Global shares treaded water on Monday as sharp falls in gold and oil prices and concerns over the spread of the coronavirus Delta variant dented sentiment.

U.S. [stock indexes dropped](https://www.financedigest.com/european-stocks-drop-as-russia-ukraine-tensions-escalate.html "European stocks drop as Russia-Ukraine tensions escalate") at the open.

The Dow Jones [Industrial Average](https://www.financedigest.com/average-annual-uk-grocery-bill-highest-since-at-least-2008-industry-data.html "Average annual UK grocery bill highest since at least 2008 -industry data") fell 99.67 points, or 0.28%, to 35,108.84, the S&P 500 lost 5.98 points, or 0.13%, to 4,430.54 and the Nasdaq Composite added 7.66 points, or 0.05%, to 14,843.43.

European shares [ticked slightly higher after a mixed](https://www.financedigest.com/wall-st-indexes-mixed-treasury-yields-tick-up-as-higher-rates-loom.html "Wall St indexes mixed, Treasury yields tick up as higher rates loom") start, while other regional indexes stayed near recent highs with earnings season winding down. \[.EU\]

The pan-European STOXX 600 index rose 0.07% and MSCI’s gauge of [stocks across the globe shed](https://www.financedigest.com/stocks-shed-gains-treasury-yields-jump-as-fed-signals-rate-hikes-could-come-soon.html "Stocks shed gains, Treasury yields jump as Fed signals rate hikes could come ‘soon’") 0.02%.

[Markets were shaken by a sudden dive](https://www.financedigest.com/diving-board-market-to-reap-excessive-revenues-through-2021-2031-fact-mr-report.html "Diving Board Market to Reap Excessive Revenues through 2021-2031: Fact.MR Report") in gold, as a break of $1,750 triggered stop-loss sales to take it as low as $1,684 an ounce.

Spot [gold dropped 1.3%](https://www.financedigest.com/russian-gold-miner-polymetals-q3-revenue-down-13-y-y.html "Russian gold miner Polymetal’s Q3 revenue down 13% y/y") to $1,739.81 an ounce. U.S. gold futures fell 1.02% to $1,742.10 an ounce.

[Oil prices](https://www.financedigest.com/oil-prices-stable-heading-for-weekly-gain.html "Oil prices stable, heading for weekly gain") fell as much as 4%, extending last week’s steep losses on the back of a rising U.S. dollar and concerns that new coronavirus-related restrictions in Asia, especially China, could [slow a global recovery in fuel demand](https://www.financedigest.com/inpost-sees-stronger-2022-but-warns-of-slowing-demand.html "InPost sees stronger 2022 but warns of slowing demand").

U.S. crude recently fell 2.86% to $66.33 per barrel and Brent was at $68.74, down 2.77% on the day.

[Holidays in Tokyo and Singapore made for thin trading](https://www.financedigest.com/dollar-firms-in-soft-holiday-trading-outlook-bullish.html "Dollar firms in soft holiday trading, outlook bullish") conditions, adding to the volatility. Yet after an initial fall, MSCI’s broadest index of Asia-Pacific [shares outside](https://www.financedigest.com/outside-door-handle-market-analysis-trends-top-manufacturers-share-growth-statistics-opportunities-and-forecast-to-2027.html "Outside Door Handle Market Analysis, Trends, Top Manufacturers, Share, Growth, Statistics, Opportunities and Forecast to 2027") Japan recovered to be up 0.1%.

Chinese trade data out over the weekend undershot forecasts, while [figures out Monday showed inflation](https://www.financedigest.com/french-inflation-revised-upwards-in-february-to-7-3-final-figures.html "French inflation revised upwards in February to 7.3% – final figures") slowed to 1% in July, offering no barrier to more policy stimulus.

The U.S. Senate came closer to passing a $1 trillion infrastructure package, though it still has to go through the House.

[Investors were still assessing](https://www.financedigest.com/dollar-tentative-as-investors-assess-rate-hike-path.html "Dollar tentative as investors assess rate-hike path") whether Friday’s strong U.S. payrolls [report would take the Federal Reserve a step nearer to winding back](https://www.financedigest.com/its-back-to-school-for-investors-as-uk-student-accommodation-less-vulnerable-to-brexit-shock-reports-jll.html "It’s back to school for investors as UK student accommodation “less vulnerable to Brexit shock” reports JLL") its stimulus.

What we’re seeing is a little bit of early profit-taking on the back of fear that tapering will come in earlier in September,” said Sebastien Galy, [senior macro strategist at Nordea Asset Management](https://www.financedigest.com/the-senior-management-regime-takes-shape.html "The Senior Management Regime takes shape"). But as you can see, it has little [impact because the effect of a better economy far outweighs the substitution effect of higher interest rates.”](https://www.financedigest.com/oil-falls-as-earthquake-impact-on-crude-eases-rate-hike-fears-rise.html "Oil falls as earthquake impact on crude eases, rate hike fears rise")

LONGER TAPER

However, the [pace of tapering was still up in the air and would decide when an actual rate](https://www.financedigest.com/ecb-should-raise-rates-at-steady-pace-chief-economist-says.html "ECB should raise rates at steady pace, chief economist says") increase comes, he said. The Fed is [buying $120 billion](https://www.financedigest.com/mercedes-benz-to-buy-back-up-to-4-billion-euros-in-shares-by-2025.html "Mercedes-Benz to buy back up to 4 billion euros in shares by 2025") of assets a month, so a $20 billion taper would end the programme in six months while a $10 billion tapering approach would take a year.

The spread of the Delta variant could argue for a longer taper, with U.S. [cases back to levels seen](https://www.financedigest.com/sydney-covid-19-cases-seen-topping-2000-a-day-as-australia-ramps-up-vaccinations.html "Sydney COVID-19 cases seen topping 2,000 a day as Australia ramps up vaccinations") in last winter’s surge with more than 66,000 people hospitalised.

Figures for July CPI due this week are also expected to confirm inflation has peaked, with prices for second-hand [vehicles finally easing back](https://www.financedigest.com/investors-go-back-to-basics-with-simpler-self-driving-vehicles.html "Investors go back to basics with simpler self-driving vehicles") after huge gains.

Four [Fed officials are speaking this week who will no doubt offer enough grist for markets](https://www.financedigest.com/markets-start-signalling-fed-may-be-going-too-far-amundi.html "Markets start signalling Fed may be going too far – Amundi") looking for clues on the timing of tapering.

In the meantime, [stocks have been mostly underpinned by a robust](https://www.financedigest.com/stocks-mixed-dollar-gains-after-robust-inflation-jobs-data.html "Stocks mixed, dollar gains after robust inflation, jobs data") U.S. earnings season. BofA analysts noted S&P 500 companies were tracking a 15% [beat on second-quarter earnings](https://www.financedigest.com/kraft-heinz-plans-more-price-hikes-as-sales-earnings-beat-estimates.html "Kraft Heinz plans more price hikes as sales, earnings beat estimates") with 90% having reported.

However, companies with earnings beats have seen muted reactions on their [stock price the day](https://www.financedigest.com/stocks-fall-treasury-yields-rise-upon-final-2022-trading-day.html "Stocks fall, Treasury yields rise upon final 2022 trading day") following earnings releases, and misses have been penalized,” they wrote in a note.

Guidance is stronger than average but consensus estimates for [two-year growth suggest a slowdown amid](https://www.financedigest.com/dollar-slides-from-near-two-year-high-amid-hawkish-signals-from-fed.html "Dollar slides from near two-year high amid hawkish signals from Fed") macro concerns.

Benchmark 10-year notes last rose 3/32 in [price to yield](https://www.financedigest.com/stocks-jump-as-treasury-yields-ease-and-oil-prices-sell-off.html "Stocks jump as Treasury yields ease and oil prices sell off") 1.28%, from 1.288% late on Friday.

The [dollar index](https://www.financedigest.com/dollar-index-jumps-after-u-s-retail-sales-show-surprise-rebound.html "Dollar index jumps after U.S. retail sales show surprise rebound") fell 0.12%, with the euro up 0.02% to $1.1762.

(Additional reporting by Wayne Cole in SydneyEditing by David Holmes and Steve Orlofsky)


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