NY Fed President Williams sees no current case for ratecuts
Reuters poll: Fed to cut rates in Sept, then once more
U.S., Japan, Korea make currency statement
(Updates to 14:47 EDT)
U.S. stocks vacillated on Thursday, swinging from red to green and back as investors contended with the push-pull of a strong economy and restrictive Federal Reserve policy.
Benchmark Treasury yields resumed their climb and gold added strength as ongoing turmoil in the Middle East bolstered the safe-haven play.
All three major U.S. stock indexes wavered throughout the session, with weakness in the chip sector weighing the Nasdaq down the most.
New York Fed President John Williams, citing economic strength，said on Thursday he does not see a convincing case for cutting the central bank's policy rate now.
On Tuesday Fed Chair Jerome Powell declined to provide guidance on when rates might be lowered.
"Markets are still recalibrating what 'higher for longer' means and whether or not there will be any interest rate cut at all this year from the Fed," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.
"If four months ago if I said there's a real possibility the Fed won't lower rates at all in 2024, the response would have likely been that will create a massive sell off in stocks," Pursche added.
"So, why hasn't it? The reason is corporate earnings seem to be strong, the economy is continuing to perform well and inflation continues to cool down albeit in an uneven manner," he said.
A Reuters poll of 100 economists indicated the Fed will implement its first rate cut in September, and cut perhaps once more this year.
"Ultimately every central bank prefers being neutral in its policy stance as opposed to either accommodative or restrictive," Pursche said. "The Fed wants to be able to signal that they've done a good job and the best way to do that is to lower rates."
Economic data released on Thursday painted a mixed picture, with low jobless claims and solid factory data versus weaker-than-expected home sales and leading economic index readings.
The Dow Jones Industrial Average .DJI fell 5.8 points, or 0.02%, to 37,747.51, the S&P 500 .SPX lost 13.89 points, or 0.28%, to 5,008.32 and the Nasdaq Composite .IXIC dropped 81.31 points, or 0.52%, to 15,602.07.
European stocks ended higher as upbeat results lifted the benchmark index, offsetting uncertainties surrounding geopolitical tensions and the timing of central bank rate cuts.
The pan-European STOXX 600 index .STOXX rose 0.24%, while MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.03%.
Emerging market stocks rose 0.42%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.55% higher, while Japan's Nikkei .N225 rose 0.31%.
Treasury yields hovered near their highest levels since November as solid economic data reinforced warnings from Fed officials that the inflation cool-down might have stalled.
Benchmark 10-year notes US10YT=RR last fell 14/32 in price to yield 4.6429%, from 4.585% late on Monday.
The 30-year bond US30YT=RR last fell 21/32 in price to yield 4.7417%, from 4.699% late on Monday.
The dollar firmed against a basket of world currencies as data affirmed the U.S. economy is on solid ground, supporting the notion that the Fed could delay its first rate cut.
The dollar index .DXY rose 0.19%, with the euro EUR= down 0.23% to $1.0646.
The Japanese yen weakened 0.12% versus the greenback at 154.59 per dollar. Sterling GBP= was last trading at $1.2439, down 0.06% on the day.
World oil prices dipped as investors juggled U.S. sanctions on Venezuela and Iran, and robust economic data against the wider backdrop of demand concerns and simmering Middle East tensions.
U.S. crude CLcv1 inched up 0.05% to settle at $82.73 per barrel, while Brent LCOcv1 settled at $87.11 down 0.21% on the day.
Gold climbed as the safe-haven metal benefited from ongoing Middle East turmoil and the prospect of fewer than expected U.S. rate cuts this year.
Spot gold XAU= added 0.9% to $2,382.33 an ounce.
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