Stocks sold around the world as Turkish crises deepens

Stocks sold off around the world, with U.S. equities erasing what would’ve been a sixth weekly gain as Turkey’s economic crisis deepened. The dollar capped its best week since June as the lira sank to a record.

The S&P 500 Index slumped in thin trading, zapping gains that had taken it within striking distance of an all-time high. European and emerging-market equities bore the brunt of selling, with losses of more than 1 percent after the U.S. escalated a diplomatic row that tipped Turkey’s economy deeper into crisis.

Geopolitical tensions between the U.S. and other countries set the tone for markets this week, with a speech from President Recep Erdogan doing little to quell investor angst that Turkey’s crisis will spread to other economies. The Trump administration doubled tariffs, exacerbating the issue.

Earlier in the week, China responded to the Trump administration’s trade war volley with additional tariffs of its own. The ruble fell the most since the 2015 oil shock after the U.S. announced new sanctions on Russia over a nerve-agent attack in the U.K.

The S&P 500 fell 0.7 percent as of 4 p.m. in New York. It dropped 0.25 percent on the week. The Stoxx Europe 600 Index sank 1.1 percent. Germany’s DAX Index lost 2 percent. The MSCI Emerging Market Index fell 1.7 percent. The MSCI Asia Pacific Index dipped 1 percent.

The euro sank 1 percent to $1.1410, the weakest in 13 months on the biggest dip in more than two weeks. The Japanese yen climbed 0.2 percent to 110.852 per dollar. The Turkish lira decreased 14 percent to 6.46 per dollar, the weakest on record with the largest tumble in more than 17 years.

West Texas Intermediate crude increased 1.2 percent to $67.63 a barrel. Gold futures decreased 0.1 percent to $1,219.20 an ounce. Corn, cotton and wheat futures slumped more than 2.3 percent.