Global stock indexes were mostly little changed 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 iShares China large-cap exchange-traded fund (FXI.P), opens new tab rallied nearly 5% early and the Golden Dragon China index (.HXC), opens new tab climbed 5.5%. Beijing ramped up efforts to put a floor under its slumping market, also boosting Chinese stocks earlier in the day.
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.
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 quarterly results and forecasts from U.S. companies. Eli Lilly (LLY.N), opens new tab shared rose after it forecast 2024 profit above estimates.
The Dow Jones Industrial Average (.DJI), opens new tab rose 79.78 points, or 0.21%, to 38,459.13, the S&P 500 (.SPX), opens new tab gained 0.66 points, or 0.01%, to 4,943.47 and the Nasdaq Composite (.IXIC), opens new tab lost 23.14 points, or 0.15%, to 15,574.54.
The MSCI world equity index (.MIWD00000PUS), opens new tab, which tracks shares in 49 nations, gained 0.24%. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS), opens new tab rose 1.42%, while Europe’s STOXX 600 (.STOXX), opens new tab index rose 0.55%.
Benchmark 10-year notes dipped 3 basis points on the day to 4.135%, after reaching an 11-day high of 4.177% on Monday.
The dollar dropped 0.35% against the yen to 148.15, while the euro was flat at $1.0742%, and the dollar index, which tracks the greenback against a basket of currencies of other major trading partners, was down 0.2% at 104.25.
China stocks jumped 3.5% in the wake of Tuesday’s developments, its biggest one-day percentage gain since 2022, while Hong Kong’s Hang Seng Index (.HIS), opens new tab rose 4%, its most in a day in six months.
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 on Tuesday it has expanded its scope of investment in exchange-trade funds.
China’s blue-chip index (.CSI300), opens new tab 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.
