Stock rally has stopped, investors are waiting for clarity

The new-year rally in global equities stalled on Thursday as investors paused to draw breath following the recent rebound and as they awaited concrete details on U.S.-China trade negotiations. Treasuries led a broad advance in bonds as oil fell.

Futures for the S&P 500, Dow Jones and Nasdaq all declined after the underlying gauges notched four straight days of gains. The Stoxx Europe 600 Index erased yesterday’s advance as automakers led most sectors lower. Japanese stocks paced declines across much of Asia, though the MSCI Asia Pacific Index was down only marginally. The offshore yuan climbed to the strongest since August as the U.S. and China laid the ground for resolving trade issues. The dollar was steady and crude pulled back after climbing above $52 a barrel and entering a bull market.

Global stocks have rallied since the start of the year amid optimism tensions are thawing between the U.S. and China on trade and as commentary from the Federal Reserve showed policy makers have shifted to a more cautious approach to further interest-rate increases. Still, concern surrounding the partial government shutdown in America continues to weigh on sentiment ahead of earnings season. And China inflation data on Thursday showcased slowing growth in the world’s second-biggest economy.

Futures on the S&P 500 Index declined 0.8 percent as of 8:09 a.m. London time, the first retreat in a week. The Stoxx Europe 600 Index fell 0.8 percent, the biggest fall in a week. The U.K.’s FTSE 100 Index fell 0.6 percent, the largest fall in a week. Germany’s DAX Index fell 0.9 percent, the biggest fall in a week. The MSCI Asia Pacific Index fell 0.1 percent, the first retreat in more than a week. The MSCI Emerging Market Index climbed 0.2 percent to the highest in five weeks.