News: Global stocks steady ahead of Fed meeting.
NEW YORK (Reuters) – Wall Street’s S&P 500 index ended lower Tuesday and an indicator for global stocks was nearly unchanged as investors waited for the Federal Reserve and other central banks’ regulators to meet this week will indicate whether they will maintain their policies in support of a post-pandemic recovery.
US stocks fell towards the end of the session and the Nasdaq lost more than 1% as longer-dated US Treasury bond yields rose, which drove investors’ excitement for Tech- Suppressed stocks that have seen high growth but are wary of rising inflation.
The US dollar rose against the euro and commodity currencies such as the Australian and New Zealand dollars as the two-day Fed meeting did not make trading volatile.
However, oil prices fell for a third day after Germany, France and other European countries stopped using AstraZeneca’s vaccine, threatening economic growth and fuel demand and tarnishing its introduction as a pillar for a global recovery.
Speculation about what the Fed will say at the end of its two-day meeting on Wednesday has kept markets tied for the most part by reach.
“For at least some investors, the hope is that they will perform an Operation Twist – buy long-term bonds and sell short-term bonds to help the economy,” said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.
The Nasdaq rose to a two-week high on a rebound in technology stocks at the heart of the February sell-off. The MSCI global equity market benchmark, which is heavily biased towards the major US tech companies, rose 0.14% to 677.96.
After the coronavirus pandemic, demand for technology stocks will continue to rise, according to Johan Grahn, head of ETF strategy at AllianzIM in Minneapolis.
“As long as technology solves real problems for people, there will continue to be a market for this type of company,” said Grahn. “There will be more demand for technology solutions across the board.”
European stocks rose after a positive forecast from German automaker Volkswagen sparked a rally in the automotive sector. The broad FTSEurofirst 300 index rose 0.8%, reaching its record high from February 2020, while the regional automotive sector rose 2.1% to its highest level since June 2018.
On Wall Street, the Dow Jones Industrial Average was down 0.39%, the S&P 500 was down 0.16%, and the Nasdaq Composite was up 0.09%.
Eurozone government bonds held out as a caution ahead of the Fed meeting.
Longer-term US Treasury bond yields initially eased as the market looked ahead.
The 10-year US Treasury bill rose 0.4 basis points to 1.6232%. Last week’s benchmark returns hit 1.642% on expectations of rising inflation.
The Fed is aiming for maximum employment and higher inflation expectations and will do everything it can to achieve higher inflation, said Steven Ricchiuto, US chief economist at Mizuho Securities USA LLC in New York.
“This is the reason for the sell-off in the 10-year note, and there are a lot of people who basically just get to realize it,” said Ricchiuto. (Graphic: Federal Open Market Committee projections)
Fed policymakers are expected to see the U.S. economy grow at the fastest rate in decades in 2021 as it recovers from a coronavirus-stricken 2020.
The Bank of England meets on Thursday again this week, and the Bank of Japan closes a two-day meeting on Friday.
The prospects for post-pandemic recovery continued to diverge between the US and Europe.
President Joe Biden’s order to make vaccinations available to all adults by May 1 contrasted with stuttering rollouts in Germany, France and elsewhere, where AstraZeneca vaccine use was suspended due to concerns about possible serious side effects has been.
In currencies, the dollar held small gains overnight, with caution ahead of central bank meetings.
The dollar index rose 0.059% and the euro 0.22% to USD 1.1902.
The Japanese yen was up 0.09% against the greenback at 109.01 per dollar.
Gold fell lower under pressure from a stronger dollar. US gold futures gained 0.1% to $ 1,730.90.
Europe’s drug watchdog said the benefits of the AstraZeneca vaccine outweigh the risks, but investors fear the slow pace of vaccination in the European Union could dampen both recovery and fuel demand.
Brent crude oil futures fell 49 cents to $ 68.39 a barrel, and US crude oil futures fell 59 cents to $ 64.80 a barrel.
Reporting by Herbert Lash with additional reporting by Ritvik Carvalho in London and by Kevin Buckland and Kane Wu in Tokyo; Adaptation by Mark Potter and Mark Heinrich
Original Source © Reuters