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Stocks Rise, Dollar Falls on ‘Accommodative’ Fed: Markets Wrap

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Stocks Rise, Dollar Falls on ‘Accommodative’ Fed: Markets Wrap
Pedestrians are reflected in an electronic stock board outside a securities firm in Tokyo, Japan. (Photographer: Tomohiro Ohsumi/Bloomberg)  

(Bloomberg) -- U.S. stocks rose with Treasuries, while the dollar fell after the Federal Reserve left interest rates unchanged and its chairman signaled it would keep policy “somewhat accommodative.”

The S&P 500 halted a two-day slide as investors viewed the last Fed decision of the year as dovish because the central bank signaled rate hikes are unlikely unless there is a meaningful change in the outlook for the economy. The 10-year Treasury rate fell below 1.8%.

The Fed, in its first unanimous vote since May, said it will continue to monitor the implications of data for the economic outlook “including global developments and muted inflation pressures.”

“It’s ‘steady as she goes’ from the Fed today,” said Jason Pride, chief investment officer of private wealth at Glenmede Trust. “This accommodative stance should provide a measure of support for risk assets heading into the new year.”

Stocks Rise, Dollar Falls on ‘Accommodative’ Fed: Markets Wrap

Equity gains had been muted throughout the session as investors kept an eye out for trade headlines. The Dow Jones Industrial Average was little changed amid more trouble for Boeing Co.’s Max plane and Home Depot Inc.‘s weak forecast. Crude slipped after U.S. inventory data.

With the world’s top two economies still wrangling over an interim deal, Thursday may bring news as Trump is expected to meet with his trade team, according to people familiar with the talks.

Here are some other key events to watch:

  • Brazil’s central bank also decides on interest rate.
  • The next European Central Bank policy meeting is on Thursday.
  • The U.K. holds a general election Thursday.

And these are the main market moves:

Stocks

  • The S&P 500 Index gained 0.3% at 4 p.m. New York time.
  • The Nasdaq Composite Index advanced 0.6%.
  • The Dow Jones Industrial Average was up 0.1%.
  • The MSCI All-Country World Index climbed 0.4%.

Currencies

  • The Bloomberg Dollar Spot Index fell 0.4%.
  • The Japanese yen rose 0.2% to 108.55 per dollar.
  • The euro added 0.3% to $1.1131.

Bonds

  • The yield on two-year Treasuries lost three basis points to 1.62%.
  • The yield on 10-year Treasuries fell five basis points to 1.79%.
  • Germany’s 10-year yield declined two basis points to -0.32%.

Commodities

  • West Texas Intermediate crude fell 0.7% to $58.84 a barrel.
  • Gold futures advanced 0.8% to $1,479.50 an ounce.
  • Brent crude gained lost 1.1% to $63.62 a barrel.

--With assistance from Claire Ballentine.

To contact the reporters on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka

©2019 Bloomberg L.P.

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