US equities and bonds tumbled on Tue. The Dow Jones Industrial Average lost 543.34 pts or 1.51% lower to close at 35,368.47. S&P 500 index fell 1.84%. The tech-heavy Nasdaq Composite retreated 2.6%. The small cap Russell 2000 shed 3.06%.
The yield on the 10-year Treasury note notched up 8.94 basis points (bps) to 1.8735%. The 2-year Treasury yield topped 1% for the first time in two years, hitting 1.05%.
Microsoft (-2.43%) agreed to pay almost US$69b in cash for video game publisher Activision Blizzard (ATVI US, +25.9%). Even after jumping in price, Activision Blizzard’s share price remains an 18% discount to Microsoft’s bid, reflecting the risk that the deal will be scuttled by anti-trust regulators.
Shares of Sony (6758 JP, -9.2%) have dropped on concerns that the merger may put Sony’s Playstation at a competitive disadvantage to Microsoft’s Xbox. France’s Ubisoft (UBI FP, +11.87%) surged on optimism it may become a takeover target.
Goldman Sachs (GS US, -6.97%) plunged on Tue, after the firm posted a lackluster 4Q result.
Oil surged after Yemen's Houthi movement claimed to be behind a drone strike at an oil facility on the outskirts of Abu Dhabi. The front-month Brent and WTI futures closed up $1.03 at US$87.51/bbl and $1.61 at US$85.43/bbl respectively.
The most actively traded US gold futures (Feb) contracts settled down $4.10, or 0.2%, at US$1,812.40/oz. Meanwhile, March silver, which is the most actively traded silver futures, rose 57.4 cents, or 2.5%, to end at US$23.492/oz.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, rose 0.5% to 95.732.
European equity markets finished lower on Tue. The UK FTSE lost 0.63%, France's CAC 40 fell 0.94%, while the German DAX retreated 1.01%.