Stocks rally, dollar falls on dovish Powell signal

Bloomberg

US stocks rallied, Treasuries turned higher and the dollar fell after a dovish tone from the Federal Reserve chairman fueled speculation the central bank is closer than thought to pausing on rate hikes.
The S&P 500 surged to a session high and the Dow Jones Industrial Average jumped more than 400 points after Jerome Powell said rates are “just below” the range of a neutral policy.
The chairman said the economic outlook remains “solid,” bolstering expectations for a rate hike when the Fed meets next month, but he noted that the effects of higher rates take time to show up in data. All told, investors surmised the bank is likely to reduce the number of hikes or outright stop them next year.
Tech shares that bore the brunt of the October sell-off led the rally. The dollar slumped the most in two weeks and the 10-year yield fell to 3.04 percent. Oil turned higher with industrial metals.
The pound erased gains after the Bank of England warned a disorderly Brexit could unleash a severe recession. Emerging-market shares climbed.
Bitcoin rose above $4,000 after plunging earlier in the week.
Trade also remained in focus, carmaker shares under pressure after President Donald Trump threatened tariffs and renewed his haranguing of General Motors for closing US plants. Trump heads to the Group of 20 meeting tomorrow where investors will look for progress in his trade war with China. Salesforce.com surged after reporting strong third-quarter results, while Tiffany tumbled on its earnings.
Salesforce.com surged around 4 percent after sales beat analysts’ estimates. Tiffany & Co.’s plunged more than 10 percent after the jeweller reported weak spending by Chinese tourists.
Wayfair jumped 15 percent after reporting a surge in holiday weekend sales.
Facebook dropped for a second day, along with Google and Netflix, while Apple rebounded and Amazon rallied.
Presidents Donald Trump and Xi Jinping plan to meet at the G-20 summit in Argentina that kicks off on Friday.
The S&P 500 Index gained 1.4 percent in New York. The Stoxx Europe 600 Index was little changed. The MSCI All-Country World Index climbed 0.3 percent to the highest in more than a week. The MSCI Emerging Market Index increased 0.7 percent to the highest in almost three weeks.
The Bloomberg Dollar Spot Index fell 0.4 percent. The euro rose 0.6 percent. The Japanese yen rose 0.2 percent. The British pound rose 0.4 percent.
The yield on 10-year Treasuries fell one basis point to 3.05 percent. Germany’s 10-year yield was steady at 0.35 percent. Britain’s 10-year yield declined two basis points to 1.374 percent.
The Bloomberg Commodity Index gained 0.6 percent. West Texas Intermediate crude fell 1.1 percent to $50.97 a barrel. Gold decreased 0.1 percent to $1,218.60 an ounce, the weakest in almost two weeks.