Persistent global trade tension put pressure on financial markets

A major global stocks index fell modestly on Friday while the Chinese yuan weakened as persistent global trade tensions hovered over financial markets. Geopolitical concerns also spiked on news that talks regarding Britain’s split with the European Union had faltered, putting pressure on the British pound. MSCI’s gauge of stocks across the globe shed 0.25%, but pared steep early losses.

In China, the Communist Party’s People’s Daily wrote in a front-page commentary that the U.S. trade war will only make China stronger and will never bring the country to its knees.

It was the latest salvo in the trade conflict that has involved tit-for-tat tariffs on imports involving the world’s two largest economies. Recent tensions caught some investors off guard after they had expected the two sides to come to a near-term deal to resolve the months-long trade dispute.

U.S. stocks fell for the first time in four days, with technology shares bearing the brunt of the selling in a market rattled by a barrage of traderelated headlines. The dollar rose. The S&P 500 declined a second week for the first time this year amid speculation U.S.-Chinese trade negotiations reached an impasse after tit-for-tat tariffs soured proceedings. Friday’s slump halted a three-day rally sparked by optimism the two sides would eventually reach a deal.

Meanwhile, iron ore rose to the highest level in almost five years. The pound weakened as U.K. Prime Minister Theresa May agreed to set a timeline to quit and Labour leader Jeremy Corbyn walked out of cross-party Brexit talks. MSCI’s gauge of emerging-market stocks fell to its lowest since January. Bitcoin slumped as much as 14%, before paring losses as this month’s surge for cryptocurrencies was tested.

The Stoxx Europe 600 Index dipped 0.4%. The U.K.’s FTSE 100 Index fell 0.1%. West Texas Intermediate crude dropped 0.2% to $62.71 a barrel. Gold fell 0.6% to $1,278.90 an ounce.