Stocks rise modestly after Fed, US data; yen slightly stronger By Reuters

By Chuck Mikolajczak

NEW YORK (Reuters) – A gauge of global markets gained on Thursday after the Federal Reserve indicated it was keeping a dovish tilt, while the yen retreated after another suspected round of intervention by the Bank of Japan.

On Wall Street, U.S. stocks gained slightly in early trading, after Fed Chair Jerome Powell said that while recent inflation readings mean it will likely take longer than expected for central bank officials to become comfortable that inflation will resume its decline, interest rate increases also remained unlikely.

“The outcome of the statement, plus the press conference was for slightly more rate cuts to be priced in, not necessarily sooner, but by the end of the year,” said Brian Nick, senior investment strategist at the Macro Institute.

Markets have consistently scaled back the timing and amount of rate cuts this year from the Fed as inflation has proved to be sticky and the labor market remains on solid footing. After expecting the first cut to come by March at the start of the year, markets now see a better than 50% chance the Fed will cut by at least 25 basis points in September, according to CME’s FedWatch Tool.

The U.S. central bank also said it would slow the speed of its balance sheet drawdown starting on June 1 to ensure this process does not create undue stress in financial markets.

U.S. economic data also showed the labor market remains tight, ahead of key government payrolls data due on Friday, while other data indicated worker productivity was subdued in the first quarter.

Tech shares led sector gains, up roughly 1%, as Qualcomm (NASDAQ:) surged about 10% following its quarterly results. Investors are also awaiting earnings from iPhone maker Apple (NASDAQ:) after the closing bell.

Of the 310 companies in the that reported earnings through Wednesday morning, 77.4% have topped analyst expectations, according to LSEG data, above the 67% beat rate since 1994 but slightly below the 79% over the past four quarters.

The rose 52.78 points, or 0.14%, to 37,956.07; the S&P 500 gained 1.72 points, or 0.03%, to 5,020.11; and the gained 28.85 points, or 0.18%, to 15,633.56.

MSCI’s gauge of stocks across the globe rose 1.52 points, or 0.20%, to 755.78, while Europe’s broad index fell 3.51 points, or 0.18%.

Shares in Europe were slightly lower after touching a one-week low earlier in the session, as investors returned from a midweek holiday and digested the Fed’s announcement and a host of earnings reports.

The Japanese yen also remained in focus, as another round of intervention in the currency was suspected shortly after Powell had finished speaking, the second such event this week.

Against the Japanese yen, the dollar weakened 0.1% to 154.32 after falling to 153.16 in the prior session.

The , which measures the greenback against a basket of six major currencies, gained 0.11% to 105.83, while the euro was down 0.27% at $1.0678.

U.S. Treasury yields were higher in the wake of the Fed and economic data, as the yield on benchmark U.S. 10-year notes rose 3.7 basis points to 4.631%, from 4.591% late on Wednesday. The yield, which typically moves in step with interest rate expectations, fell 1.2 basis points to 4.9268%.

Oil prices were little changed after a recent slump to a seven-week low, losing some ground after the U.S. labor market data. lost 0.22% to $78.83 a barrel and rose to $83.46 per barrel, up 0.02% on the day.