(Updates to close, adds commentary)
* GRAPHIC-World FX rates in 2019: http://tmsnrt.rs/2egbfVh
By Sinéad Carew
NEW YORK, May 6 (Reuters) - Wall Street's indexes and bond yields ended down but well above their session lows while oil futures settled higher as investors bet that U.S. President Donald Trump's threats to raise tariffs on China would not materialize.
Trump tweeted on Sunday that the United States would raise tariffs on $200 billion worth of Chinese goods this week, causing investors to seek safety and flee from risky assets. On Monday, Trump sharply criticized China. as Monday's session wore on, the initial shock from the threats appeared to wear off. U.S. Treasury yields pared some of their declines. futures reversed course to settle slightly higher after a volatile day as rising tensions between the United States and Iran helped buoy prices. The futures had earlier touched a one-month low due to Trump's tweets. O/R
In stocks, the S&P 500 closed down 0.4% after falling as much as 1.6% during the session.
"Investors are warming up to the idea that its more of a negotiation tactic than it is a petulant child screaming bloody murder," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.
Fears about trade war escalation were also calmed somewhat by a statement from China's foreign ministry on Monday that a Chinese delegation was still preparing to go to United States for trade talks. now the contingent from China is still coming. If that changes, then the market narrative and the market reaction might also change," said Nolte.
The Dow Jones Industrial Average .DJI fell 66.47 points, or 0.25%, to 26,438.48, the S&P 500 .SPX lost 13.17 points, or 0.45%, to 2,932.47 and the Nasdaq Composite .IXIC dropped 40.71 points, or 0.5%, to 8,123.29.
The pan-European STOXX 600 index .STOXX lost 0.88% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.65%. In comparison, the Shanghai SE Composite .SSEC had closed up 5.6% in its biggest one-day percentage drop since February 2016. PRICES, OIL FUTURES RISE
The U.S. dollar slipped to a five-week low against the yen and fell versus other currencies on Monday after Trump said he would sharply raise tariffs on Chinese goods this week, risking the derailment of the trade talks between Washington and Beijing. though, was thin overall with London and Tokyo markets closed for holidays.
The dollar weakened 0.30% versus the yen to 110.89 per dollar. The dollar index .DXY rose 0.01%, with the euro EUR= unchanged at $1.12.
Benchmark 10-year Treasury notes US10YT=RR last rose 9/32 in price to yield 2.4998%, from 2.53% late on Friday.
U.S. West Texas Intermediate (WTI) crude CLc1 futures settled up 31 cents, or 0.5%, at $62.25 a barrel. Brent crude LCOc1 futures settled up 39 cents, or 0.55%, at $71.24 a barrel. GRAPHIC-World FX rates in 2019
http://tmsnrt.rs/2egbfVh
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