NEW YORK, Feb 7 ― Global stock indexes edged up yesterday while US Treasury yields eased as investors looked for more clues on how soon the Federal Reserve may start cutting interest rates.
The US dollar weakened slightly but stayed close to its highest level in nearly three months in the wake of recent strong economic data and the Fed's recent hawkish stance on rates.
Cleveland Fed President Loretta Mester said yesterday that if the US economy performs as she expects, it could open the door to rate cuts. But Mester said she was not ready to provide timing for easier policy amid ongoing inflation uncertainty.
Traders have pushed back expectations of the Fed's first rate cut to May, after previously pricing in a likely rate reduction in March.
“Now traders are wondering if instead of whether we'll get a soft landing or recession, whether we could have no landing or re-acceleration this year,” said Matthew Weller, global head of research at FOREX.com.
Investors on Wall Street also digested the latest quarterly results and forecasts from US companies. Shares of chemicals firm DuPont de Nemours jumped after it reported upbeat results and announced a US$1 billion (RM4.76 billion) share-repurchase programme.
The Dow Jones Industrial Average rose 141.24 points, or 0.37 per cent, to 38,521.36, the S&P 500 gained 11.42 points, or 0.23 per cent, to 4,954.23 and the Nasdaq Composite gained 11.32 points, or 0.07 per cent, to 15,609.00.
The MSCI world equity index, which tracks shares in 49 nations, gained 0.51 per cent.
Overnight, Beijing ramped up efforts to put a floor under its stock market, boosting Chinese blue-chip stocks more than 3 per cent. In New York trading, the iShares China large-cap exchange-traded fund FXI.P rallied 5.7 per cent while the Golden Dragon China index climbed 5.9 per cent.
The Treasury saw solid demand for an auction of new three-year notes.
Benchmark 10-year notes slipped 7 basis points on the day to 4.096 per cent, after reaching an 11-day high of 4.177 per cent on Monday. Two-year yields fell 6 basis points to 4.412 per cent and are down from a one-month high of 4.483 per cent on Monday.
The dollar index, which measures the US currency against six others, fell 0.24 per cent to 104.19, after touching 104.60 on Monday, its highest since November 14.
The euro was up 0.09 per cent at US$1.0751.
A slew of announcements from China's securities regulator, a reported upcoming meeting between President Xi Jinping and financial regulators highlighted the urgency with which Chinese authorities are trying to stem heavy losses in its stock market. State fund Central Huijin Investment also said it has expanded its scope of investment in exchange-traded funds.
China's blue-chip index plunged to a five-year low last week on the back of the country's ailing economy, which had prompted state-backed investors, dubbed the “national team”, to step up their buying of blue-chip stock tracking index funds to support the market.
Brent and US crude futures climbed after the US Energy Department said crude oil production would not grow as fast as previously forecast.
US crude rose 0.7 per cent to settle at US$73.31 a barrel, while Brent crude rose 0.8 per cent to US$78.59. Spot gold rose 0.6 per cent to US$2,035.89 per ounce. ― Reuters