Stocks rise as Turkey fears fade

U.S. stocks halted their longest slide since March and the dollar reached a 14-month high as investors brushed off Monday’s Turkey-induced turmoil. Treasuries dropped and WTI crude hovered above $67 a barrel.

The S&P 500 Index rose for the first time in five days amid thin summer trading. Small-cap shares paced the gains, with the Russell 2000 Index leading among major U.S. equity benchmarks. Tapestry Inc., the handbag maker formerly known as Coach, was the top performer in the S&P 500 after its quarterly results showed that shoppers are returning to its Kate Spade brand. Meanwhile, Tesla Inc. sank 2.5 percent following reports that Goldman Sachs Group Inc. hadn’t been formally hired as an adviser to help take the company private.

The gains in American stocks tracked a similar move in Asia as the rout in Turkish assets eased. The lira rose, and the country’s benchmark equity index climbed even as a diplomatic standoff with the U.S. dragged on. European peripheral debt climbed, but the euro fell to its lowest against the dollar since June 2017 and the Stoxx Europe 600 Index plunged after data showed the region’s economy grew faster in the second quarter than initially reported.

“Since there doesn’t appear to be signs of contagion at this point — although Spanish, French and Italian banks are owed close to $140 billion by Turkish borrowers — it doesn’t seem like there is much to worry about,” Chris Zaccarelli, chief investment officer for the Independent Advisor Alliance, wrote in a note Tuesday. “But these things can turn on a dime.”

In Asia, Japan’s equities outperformed while the yen had its biggest decline in two weeks. Shares in Shanghai and Hong Kong dropped after data showed China’s economy hit a mid-year rough patch, though the offshore yuan edged higher.

Elsewhere, oil fell as focus returned to near-term supply risks. Bitcoin briefly slid below $6,000 and dozens of smaller digital tokens declined as this month’s sell-off in cryptocurrencies showed few signs of letting up.