(Bloomberg) -- The iShares MSCI Emerging Markets Index exchange-traded fund fell for the first time in three days on concern U.S. lawmakers will fail to reach a budget deal. South Africa’s rand jumped after surprising factory data.

The developing-nation ETF slipped 0.3 percent to $41.86 at 10:10 a.m. in New York. The MSCI Emerging Markets Index dropped less than 0.1 percent to 1,012.55 as 423 stocks retreated, while 320 gained. The Philippine Stock Exchange Index led losses among 94 global equity gauges tracked by Bloomberg on inflation concern. Brazil’s Ibovespa snapped a three-day rally after industrial output in China, its top trading partner, trailed estimates. The rand strengthened as much as 1.2 percent.

Stocks joined a decline in U.S. equities on speculation a budget deal could fall apart amid opposition from Republicans who don’t trust plans for future savings and Democrats who say it punishes federal workers by requiring they contribute more to pension plans. An agreement would mark a reprieve in three years of fiscal standoffs and, if Congress passes it, would stave off the risk of another shutdown for at least a year or two.

Utility and industrial shares in the MSCI Emerging Markets Index retreated, while commodity companies advanced. The broad measure trades at 10.6 times projected earnings, compared with the valuation of 14.5 for the MSCI World Index. The Chicago Board Options Exchange Emerging Markets ETF Volatility Index, a measure of options prices on the fund and expectations of price swings, advanced 0.7 percent to 25.04.

The premium investors demand to own emerging-market debt over U.S. Treasuries was unchanged at 331 basis points, according to JPMorgan Chase & Co.

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