Global stock index dips while bond yields rise, oil prices drop

By Sinéad Carew, Dhara Ranasinghe

NEW YORK/ LONDON (Reuters) -MSCI's global equities index lost ground on Monday on the latest uncertainty around tariffs while oil prices fell on the prospect of production increases and U.S. bond yields rose.

U.S. Treasury yields were marginally higher after data showed that the services sector in the world's largest economy remained resilient last month, with prices paid, an inflation gauge, hitting a two-year high. 

Gold prices rallied, driven by a weaker U.S. dollar and safe-haven demand ahead of the U.S. Federal Reserve's interest rate policy decision due later in the week.

MSCI's gauge of stocks across the globe fell 3.04 points, or 0.36%, to 846.21 after nine sessions of gains.

But overall trading was subdued with public holidays in countries including Britain, China and Japan. The pan-European STOXX 600 index earlier closed up 0.16%.

On Wall Street, all three major averages ended lower with S&P 500 and the Dow Jones Industrial Average breaking nine-session winning streaks. 

"Stocks are taking somewhat of a breather (Monday) after two weeks of effectively moving higher from the early April lows," said Sahak Manuelian, managing director, head of equity trading at Wedbush Securities, adding that trading volume was low.

Equities had opened lower on renewed uncertainty about U.S. President Donald Trump's trade policies after he announced a 100% tariff on movies produced outside the United States but offered little clarity on how the levies would be implemented.

"Markets like certainty, and investors woke up (Monday) morning with more uncertainty as to what might happen with tariffs," said Adam Sarhan, CEO of 50 Park Investments in Orlando, Florida.

The news on movie tariffs hit shares in video streaming providers such as Netflix and Paramount Global. 

Sarhan said investors are concerned that more industries could be targeted "if investors wake up to another 100% or 200% levy on some other industry which is integral to our economy."

Trump said on Sunday that the United States is meeting with many countries, including China, about trade, and that his main priority with China is to secure a fair deal.

Optimism around a potential de-escalation of trade tensions between the United States and China had boosted markets in recent days, with European shares trading just below levels seen before Trump's April 2 major tariff announcement roiled markets.

In Wall Street equities, the Dow Jones Industrial Average fell 98.60 points, or 0.24%, to 41,218.83, the S&P 500 fell 36.29 points, or 0.64%, to 5,650.38 and the Nasdaq Composite fell 133.49 points, or 0.74%, to 17,844.24. 

In energy markets, oil prices fell more than $1 a barrel after OPEC+ decided over the weekend to expedite oil output hikes, spurring investor concerns of more supply when the outlook for demand is uncertain.

U.S. crude settled down $1.16 or 1.99% at $57.13 a barrel and Brent ended at $60.23 per barrel, down $1.06 or 1.73% on the day.    

In currency markets, the Taiwan dollar marked a second consecutive session of sharp gains against the U.S. dollar, which touched a low of 28.815 against Taiwan's dollar and was last at 29.104.

The rise of the Taiwan currency stoked speculation of a revaluation of Asian currencies to win U.S. trade concessions.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,

fell 0.06% to 99.82.

The euro was up 0.13% at $1.131 while against the Japanese yen, the dollar weakened 0.8% to 143.77. 

In U.S. Treasuries, the yield on benchmark U.S. 10-year notes rose 2.9 basis points to 4.349%, from 4.32% late on Friday, while the 30-year bond yield rose 4.1 basis points to 4.8356%.

The 2-year note yield, which typically moves in step with interest rate expectations for the Fed, rose 0.3 basis points to 3.843%, from 3.84% late on Friday.

In precious metals, spot gold rose 2.82% to $3,331.35 an ounce. U.S. gold futures rose 2.42% to $3,310.10 an ounce.

(Reporting by Sinéad Carew in New York, Dhara Ranasinghe in London; Additional reporting by Wayne Cole in Sydney; Editing by Mark Potter, Ros Russell, Barbara Lewis, Will Dunham and Marguerita Choy)