Stocks edge up, Treasury yields slip, China ETFs gain

By Caroline Valetkevitch

NEW YORK (Reuters) -Global stock indexes edged up on Tuesday while U.S. Treasury yields eased as investors looked for more clues on how soon the Federal Reserve may start cutting interest rates.

The U.S. 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 on Tuesday that if the U.S. 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 U.S. companies. Shares of chemicals firm DuPont de Nemours jumped after it reported upbeat results and announced a $1 billion share-repurchase program.

The Dow Jones Industrial Average rose 141.24 points, or 0.37%, to 38,521.36, the S&P 500 gained 11.42 points, or 0.23%, to 4,954.23 and the Nasdaq Composite gained 11.32 points, or 0.07%, to 15,609.00.

The MSCI world equity index, which tracks shares in 49 nations, gained 0.51%.

Overnight, Beijing ramped up efforts to put a floor under its stock market, boosting Chinese blue-chip stocks more than 3%. In New York trading, the iShares China large-cap exchange-traded fund rallied 5.7% while the Golden Dragon China index climbed 5.9%.

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%, after reaching an 11-day high of 4.177% on Monday. Two-year yields fell 6 basis points to 4.412% and are down from a one-month high of 4.483% on Monday.

The dollar index, which measures the U.S. currency against six others, fell 0.24% to 104.19, after touching 104.60 on Monday, its highest since Nov. 14.

The euro was up 0.09% at $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. [.SS]

Brent and U.S. crude futures climbed after the U.S. Energy Department said crude oil production would not grow as fast as previously forecast.

U.S. crude rose 0.7% to settle at $73.31 a barrel, while Brent crude rose 0.8% to $78.59. Spot gold rose 0.6% to $2,035.89 per ounce.

(Reporting by Caroline Valetkevitch; Additional reporting by Karen Brettell and Herbert Lash in New Yok, and Alun John in London and Rae WeeEditing by Ros Russell, David Gregorio and Lisa Shumaker)

tagreuters.com2024binary_LYNXMPEK150W9-VIEWIMAGE

tagreuters.com2024binary_LYNXMPEK15025-VIEWIMAGE