Stocks cut losses, dollar drops after Fed statement

NEW YORK (Reuters) – A gauge of global stocks cut losses on Wednesday and benchmark U.S. Treasury yields largely held gains after the Federal Reserve repeated its pledge to keep its target interest rate near zero for years to come.

FILE PHOTO: The Wall Street sign is pictured at the New York Stock exchange (NYSE) in the Manhattan borough of New York City, New York, U.S., March 9, 2020. REUTERS/Carlo Allegri

The U.S. dollar also weakened after the highly anticipated statement from the U.S. central bank, which projected a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down.

The benchmark 10-year Treasury note, which touched 1.689%, its highest level since January 2020, earlier in the session, last fell 11/32 in price to yield 1.6603%, from 1.623% late on Tuesday.

“The Fed statement today was more optimistic than some expected, they raised their outlook for both economic growth and the labor market,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “The market’s view of the statement is that it was fairly optimistic.”

On Wall Street, major indexes were mixed after moving higher after the Fed statement.

The Dow Jones Industrial Average rose 140.82 points, or 0.43%, to 32,966.77, the S&P 500 lost 0.9 points, or 0.02%, to 3,961.81 and the tech-heavy Nasdaq Composite dropped 33.15 points, or 0.25%, to 13,438.42.

The pan-European STOXX 600 index lost 0.45% and MSCI’s gauge of stocks across the globe shed 0.06%, after falling more sharply earlier in the session.

In currencies trading, the dollar index fell 0.33%, with the euro up 0.52% to $1.1962.

Oil slipped for a fourth day, weighed down by expectations of weaker demand in Europe and by rising U.S. crude inventories.

U.S. crude recently fell 0.17% to $64.69 per barrel and Brent was at $68.11, down 0.41% on the day.

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