By Caroline Valetkevitch
NEW YORK (Reuters) - Stocks on world markets edged higher on Wednesday, recovering from a recent selloff on rapidly escalating China-U.S. trade tensions, while Treasury yields rose after the Federal Reserve chairman said the U.S. central bank should continue with a gradual pace of interest rate increases.
Fed Chairman Jerome Powell said the pace should stay the same given that the labor market does not seem to be overly tight.
The S&P 500 edged higher along with the Nasdaq, with technology shares providing support.
Boeing also rose after selling off on trade war worries the day before.
"A lot of people believe the track that the (U.S.) president is taking is a negotiation tactic. And the people who still think the trade war will develop, believe it would be China that comes to the table with concessions first," said Robert Pavlik, chief investment strategist and senior portfolio manager at SlateStone Wealth LLC in New York.
The Dow Jones Industrial Average erased its year-to-date gains on Tuesday after President Donald Trump's latest tariff threats against Chinese goods.
The Dow Jones Industrial Average fell 44.72 points, or 0.18 percent, to 24,655.49, the S&P 500 gained 6.34 points, or 0.23 percent, to 2,768.93 and the Nasdaq Composite added 55.39 points, or 0.72 percent, to 7,780.97.
The pan-European FTSEurofirst 300 index rose 0.46 percent and MSCI's gauge of stocks across the globe gained 0.41 percent.
MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.72 percent higher, while shares in Hong Kong, Seoul and mainland Chinese indexes also rose.
Helping those shares was a state radio report that China will use targeted cuts in banks' reserve requirement ratios and other monetary policy tools to boost credit for small firms.
Powell's comments boosted yields in the U.S. Treasury market.
Benchmark 10-year notes last fell 5/32 in price to yield 2.9114 percent, from 2.893 percent late on Tuesday. Before Powell's remarks, U.S. yields had been little changed.
The euro held slim losses against the dollar as European Central Bank President Mario Draghi said the factors holding back local wages are subsiding and the ECB is confident inflation in the euro zone would move toward its 2-percent goal.
The dollar index fell 0.09 percent, with the euro down 0.03 percent to $1.1585.
In commodities markets, copper prices eased again after an inventory rise highlighted healthy supplies, extending declines from Tuesday tied to trade war worries.
Copper lost 0.94 percent to $6,776.00 a tonne.
U.S. crude rose 1.63 percent to $66.13 per barrel and Brent was last at $75.19, up 0.15 percent.
(Additional reporting by Richard Leong and Gertrude Chavez-Dreyfuss in New York, Medha Singh in Bengaluru, Eric Onstad, Sujata Rao, Dhara Ranasinghe and Marc Jones in London and Andrew Galbraith in Shanghai; Editing by Jon Boyle and James Dalgleish)
This story has not been edited by Firstpost staff and is generated by auto-feed.
Updated Date: Jun 21, 2018 00:06 AM