➤ US, China believed to be struggling to set September meeting date.
➤ UK PM asks lawmakers to back his Brexit plans or face snap elections.
➤ Italy bonds rally as the 5-Star Movement, Democratic Party propose expansionary budget.
U.S. stocks declined Sept. 3, tracking losses in Europe, as trade negotiators struggled to fix a date for the next face-to-face negotiations. The British pound fell below $1.20 for the first time in nearly three years as Prime Minister Boris Johnson asked lawmakers to back his Brexit plans or face snap elections.
The S&P 500 index slid 0.9% as of about 10 a.m. ET, while the Dow Jones Industrial Average dropped 1.1% on the first day of trading after the Labor Day holiday.
President Donald Trump said that a proposed September trade meeting remained on the table, while pressuring China to make a deal now or risk a much tougher agreement if he gets reelected next year.
The U.S. started imposing 15% tariffs on a host of Chinese products Sept. 1 while China introduced new duties on U.S. crude oil.
Separately, China filed a complaint with the World Trade Organization against the U.S. over the latter's import duties, saying that the recent round of levies breached an agreement struck in Japan. In addition, China announced tariffs on phenol imports from the U.S., the European Union, South Korea, Japan and Thailand, saying the products were being dumped in China.
Treasuries rallied as data from ISM showed that U.S. manufacturing unexpectedly contracted for the first time in three years in August.
European bourses declined with Germany's DAX losing 0.6% and France's CAC 40 0.8% lower. The FTSE 100 declined 0.5%.
In Asia, the Shanghai SE Composite posted a 0.2% gain at market close, while Japan's Nikkei 225 was flat. Hong Kong's Hang Seng fell 0.4%.
The British pound was little changed against the dollar after falling as low as $1.1957, the weakest intraday level since October 2016. U.K. Prime Minister Boris Johnson threatened to hold snap elections if Parliament backs a measure to stop a no-deal Brexit and further delay the country's departure from the EU.
The proposed legislation requires the government to either reach a new Brexit deal during the Oct. 17-18 meeting of the European Council, or seek the approval of U.K. lawmakers to proceed with a no-deal Brexit. If the government fails to meet those conditions, Johnson will be forced to ask for another delay to the Brexit date, this time to Jan. 31, 2020.
Johnson will need a two-thirds majority in parliament to call snap elections.
Sterling's path hinges on whether the legislation to block a no-deal Brexit is passed or not, and "neither looks good for sterling," said Citi analysts in a note.
The euro was little changed at 1.0967 per the dollar, while the Japanese yen strengthened 0.4% to 105.86 per dollar.
The Australian dollar rose 0.4% versus its U.S. counterpart after the Reserve Bank of Australia held the cash rate at a record low of 1%.
Ten-year Treasury yields shed 5 basis points to 1.44%.
U.K. government bonds also rallied as yields on 10-year gilts fell 3 basis points to 0.38%. Italian bond yields declined 9 basis points to 0.88% as the 5-Star Movement and the Democratic Party agreed an expansionary 2020 budget as part of their planned government's agenda.
Brent crude oil fell 2.3% to $57.34 per barrel on the ICE Futures Exchange. Gold spot advanced 1% to $1,544.37 per ounce.
More from S&P Global Market Intelligence:
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S&P 500 earnings for the week of Sept. 2
The day ahead:
9:45 a.m. ET — U.S. purchasing managers' manufacturing index (Econoday consensus: 49.9)
10 a.m. ET — U.S. Institute for Supply Management manufacturing index
10 a.m. ET — U.S. construction spending (Econoday consensus: 0.3% month over month)
8:30 p.m. ET — Japan PMI composite
9:30 p.m. ET — Australia GDP
9:45 p.m. ET — China Caixin Services PMI
