By Saqib Iqbal Ahmed
NEW YORK (More Bank) – The global stock market index advanced on Thursday, concerns over the lack of clear signs of a resolution of the trade dispute between the two countries being offset by the president's assurances from the Federal Reserve, Jerome Powell, that the US central bank has the ability to be patient about monetary policy.
The dollar rebounded after reaching its lowest level in three months, while US Treasury debt prices erased gains after a small 30-year bond auction and Powell said the central bank American "would" significantly reduce the size of its balance sheet.
The MSCI index for all countries, which suffered some pressure following the withdrawal of US stocks following Powell's comments on the Fed's balance sheet, recovered 0.35%. Thursday marked the fifth consecutive session of gains in the index.
Speaking at the Economic Club of Washington, Powell said the US central bank could be patient about monetary policy given price stability. He downplayed the forecasts of policymakers suggesting that interest rates would be increased twice as much this year.
"The stock market wants to hear the Fed's dovish speeches, whether it's about Powell, the governors or the presidents," said Willie Delwiche, investment strategist at Baird in Milwaukee.
Global stocks began Thursday down, after China said three days of talks with the United States, which ended on Wednesday, had established a "base" for resolving disputes. But it gave little detail on the key issues at stake, including a scheduled increase in US tariffs on Chinese imports worth $ 200 billion.
The trade war between the two giants of the economy has disrupted the flow of goods worth hundreds of billions of dollars.
On Wall Street, stocks rose sharply after being muddled in retail stocks after Macy's Inc. trimmed its annual profit and comparable sales forecast. The S & P 500 retail index dropped 0.4% and Macy's shares fell 17.7%.
The Dow Jones Industrial Average rose 122.8 points, or 0.51%, to close at 24,001.92, the S & P 500 gained 11.68 points, or 0.45%, to end at 2,596 , 64 and the Nasdaq Composite added 28.99 points, or 0.42%, to finish at 6,986.07.
The pan-European STOXX 600 benchmark closed up 0.34%.
US Treasury prices erased expected gains and 10-year benchmark bonds lost 1/32 for a return of 2.7296%, against 2.728% on Wednesday night.
The dollar bounced back from a three-month low, extending gains against the euro and the yen, following remarks by Fed Chairman Powell that the US central bank had the advantage. He intends to further reduce his balance sheet, suggesting that he has not yet done so.
The dollar index, which is in a basket of six major currencies, rose 0.36% to 95.564, after reaching a low of three months.
In commodities markets, oil prices have clung to their recent gains.
Futures contracts on Brent increased 24 cents to $ 61.68 per barrel, a gain of 0.39%. Futures on WTI (West Texas Intermediate) crude rose 23 cents to $ 52.59 a barrel, a gain of 0.44%.
Both benchmarks increased about 5% the day before.
The strength of the dollar, which makes gold more expensive for holders of other currencies, weighed on gold prices. Spot gold fell 0.51% to $ 1,286.42 an ounce.
(Report by Saqib Iqbal Ahmed, additional report by Lewis Krauskopf in New York, edited by Bernadette Baum and Dan Grebler)