U.S. equities and stock exchange traded funds hovered near record highs as materials producers kept a lid on gains with falling metals prices.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.1% lower Monday.
Dragging on the equities market, materials shares in the S&P 500 dipped 0.7% due ongoing weakness in base metal prices, notably copper. Industrial metals look brittle on weak economic data out of China, which raised concerns about slipping demand from the world’s largest consumer of copper, the Wall Street Journal reports.
Traders also sold off on European equities and currencies in the wake of Emmanuel Macron’s widely anticipated victory in the run-off French elections. Many likely engaged in the time-honored tradition of profit taking as European equities surged in the week leading up to the election.
“With the market expecting this kind of result [in the French election], there is no goodwill effect today,” Gilles Pradère, a portfolio manager at RAM Active Investments, told the WSJ.
Macron’s win over anti-euro Marine Le Pen will bolster the European Eunion and deals a blow to the rising populism that has swept western democracies for the past year.
Traders, though, are also concerned that there is little room for a relief rally as eyes now shift to challenges the incoming president will face. Investors are also waiting for French legislative elections in June, which observers argue will determine whether or not Macron can push through his agenda, along with votes in Germany and Italy, which may further add to European political risks.
“We’re sitting here waiting for additional information to digest for the balance of this week. But we remain largely constructive of the equity market and view that the path of least resistance is higher,” Bill Northey, chief investment officer at Private Client Group of U.S. Bank, told Reuters.
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