? Turkish lira sinks.
? Treasury yields fall ahead of FOMC minutes.
? Yen climbs; euro and sterling drop against dollar.
? Italian bonds, stocks fall over stalled coalition.
? Wall Street set to open lower.
Stock markets fell as global trade concerns resurfaced, Italian bonds resumed a selloff on political fears, and the Turkish lira plummeted as Japanese investors dumped the emerging-market currency. Futures pointed to a lower opening for Wall Street, and 10-year Treasury yields dropped ahead of the Federal Open Market Committee's minutes.
The Turkish lira sunk 4.1% against the U.S. dollar to 4.8696 as of 7:11 a.m ET as Japanese margin investors lost confidence in the high-yielding currency, strategists at ING Research wrote. Foreign investors are looking to policymakers to slow a lira slump, though they fear that substantive measures may not come before the central bank's meeting June 7.
"With Turkey exposed to FX borrowing and higher energy bills, the fear is that pressure will build further on Turkish corporates," ING added. The yen, deemed a safe haven currency, gained 1% against the dollar to 109.75.
Italian bonds fell, with yields on 10-year government bonds surging 10 basis points to 2.428% as President Sergio Mattarella delayed confirming nominee Giuseppe Conte as prime minister. The president is also reportedly resisting Paolo Savana's appointment as finance minister, an economist who has called Italy's membership of the euro an "historic error."
Ten-year yields on German Bunds fell by more than 5 basis points to 0.507%, and the euro was down 0.62% against the dollar. The FTSE MIB fell 1.71% in Milan.
Other European stock markets also followed Asian exchanges into the red as trade concerns resurfaced, with U.S. President Donald Trump suggesting a fine of over $1 billion on ZTE Corp., among "various deals" being discussed with China. The U.S. may also face up to $3.5 billion in trade levies from Russia, the European Union, Japan, Turkey and China in retaliation for steel and aluminum tariffs. The Euro Stoxx 50 lost 1.3%, and the FTSE 100 fell 0.73%. The Shanghai SE Composite dipped 1.41%, and Hong Kong's Hang Seng index closed 1.82% lower. The S&P 500 Index was set to open 0.59% lower.
Yields on benchmark 10-year U.S. Treasury bonds fell by 5 basis points to 3.017% ahead of the Federal Reserve's May monetary policy meeting minutes.
"Today's minutes should give us a greater insight into whether policymakers do have concerns about the recent slowdown in the U.S. economy and whether the recent rises in oil prices are giving them any concerns about consumer spending, as well as inflation," CMC Markets' Michael Hewson wrote.
Sterling dropped 0.83% against the dollar as the U.K.'s headline inflation slipped to 2.4% in April.
Brent crude shed 0.85% to $78.89 per barrel on the ICE Futures Exchange ahead of a petroleum status report by the U.S. Energy Information Administration. Gold rose 0.32% to $1,301.60 per ounce.
More from S&P Global Market Intelligence:
Financial, industrial groups launch anti-ESG movement coalition
House subcommittee draft bill to tackle IoT regulation
US bank regulatory rollback law heads to Trump's desk
Fitch: China tariffs manageable for US agriculture sector
US trade deficit to widen, trade war or no trade war: S&P Global Ratings
Trump gets his right-to-try win; FDA chief 'comfortable' after initial criticism
Lowe's new CEO has home improvement pedigree, analysts say
The day ahead:
9:45 a.m. ET — U.S. PMI composite flash (Econoday consensus: 54.8)
10:00 a.m. ET — U.S. new home sales (Econoday consensus: 677,000)
10:00 a.m. ET — Eurozone consumer confidence flash (Econoday consensus: 0.3)
10:30 a.m. ET — U.S. EIA petroleum status report
2:00 p.m. ET — U.S. Federal Open Market Committee minutes
2:15 p.m. ET — U.S. Fed's Neel Kashkari speaks
