Wall Street rally fizzles, U.S. dollar rises, after Fed rate hike
By Hilary Russ NEW YORK (Reuters) - A rally in U.S. equities fizzled out late on Wednesday, while the U.S. dollar rose, after the Federal Reserve raised interest rates, as expected, and flagged the end of its 'accommodative' monetary policy.
By Hilary Russ
NEW YORK (Reuters) - A rally in U.S. equities fizzled out late on Wednesday, while the U.S. dollar rose, after the Federal Reserve raised interest rates, as expected, and flagged the end of its "accommodative" monetary policy.
With steady economic growth and a strong job market, the Fed indicated that it still foresees another rate rise in December, three more next year, and one in 2020.
Though the U.S. dollar was higher, it had briefly stumbled after the Fed decision.
"The strong dollar has been torpedoing everyone's international investments for the better part of a year or so," said Jamie Cox, Managing Partner at Harris Financial Group in Richmond, Virginia.
"If the dollar tails off here or just levels off, that is very bullish for emerging markets and other places where that dollar strength has really been a problem."
The Dow Jones Industrial Average <.DJI> fell 106.93 points, or 0.4 percent, to 26,385.28, the S&P 500 <.SPX> lost 9.59 points, or 0.33 percent, to 2,905.97 and the Nasdaq Composite <.IXIC> dropped 17.11 points, or 0.21 percent, to 7,990.37.
The higher greenback also dented the Canadian dollar, which hit its lowest level
U.S. Treasury yields fell, with the yield curve now at its flattest levels in over a week. Longer-dated yields led the bond market in the wake of Fed Chairman Jerome Powell's inflation comment.
"His statements on the economy at the press conference was pretty bullish," said Dec Mullarkey, managing director of investment strategies at Sun Life Investment Management in Wellesley, Massachusetts. "On the inflation front, he saw things as pretty contained."
Benchmark 10-year notes
Earlier in the day, Chinese equity markets had set a positive tone after global index provider MSCI
(Graphic: MSCI world index - ups and downs in 2018 - https://reut.rs/2xBIVnO)
Shanghai-listed shares closed almost 1.0 percent higher at eight-week highs <.SSEC> and the Hang Seng Index, made up of large Hong Kong companies <.HSI>, rose 1.15 percent.
The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.27 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.15 percent.
The dollar index <.DXY> rose 0.15 percent, with the euro
Oil prices eased off four-year highs above $82 hit on Tuesday but were still set for a fifth consecutive monthly quarter of gains, driven by a looming drop in Iranian exports in the last quarter of the year when global demand heats up.
(Additional reporting by Fergal Smith in Toronto; Lewis Krauskopf, Caroline Valetkevitch, Richard Leong and Gertrude Chavez-Dreyfuss in New York; Editing by Chizu Nomiyama)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.