Stocks climb before Fed as dollar rises with Treasuries


US equities edged higher as markets largely entered a holding pattern before the Federal Reserve’s rate decision. The dollar climbed with Treasuries.
Pharmaceutical companies were among the best performers while energy shares lagged behind as Brent oil pulled back from a four-year high. Nike Inc. fell as much as 3 percent after reporting earnings.
The pound weakened as Theresa May doubled down on her Brexit stance, while European bonds climbed and Italian debt outperformed. The Stoxx Europe 600 Index drifted.
While investors are treating another Fed rate hike as all but certain on Wednesday, the outlook for future policy as signalled by the dot plot and any comments from Chairman Jerome Powell will be key to whether bond markets extend their recent selloff.
Ten-year Treasury yields are just below their year-to-date peak, while two-year yields are at a decade high.
“The US domestic economy is trotting along nicely; the rest of the world is not in the same place and there’s no doubt that global investor caution is continuing to increase as the trade war between the US and China appears to be heating up,” Nick Twidale, chief operating officer at Rakuten Securities Australia, wrote in a note.
Elsewhere, Japan’s Topix ended just below its highest point in almost eight months, while stocks rallied in Hong Kong as traders returned from a holiday and Chinese shares rose after MSCI Inc. said it’s considering increasing the country’s weight in its global indexes.
The Fed decision on Wednesday will be followed by a press conference with Chairman Jerome Powell. Thursday sees durable goods, GDP data and jobless claims for the US.
The S&P 500 Index rose 0.2 percent in New York.
The Stoxx Europe 600 Index rose 0.2 percent. The Nikkei 225 rose 0.4 percent. The MSCI Emerging Market Index climbed 0.6 percent.
The Bloomberg Dollar Spot Index gained 0.1 percent. The euro declined 0.2 percent to $1.1739, the weakest in a week. The British pound fell 0.1 percent to $1.3175. The Japanese yen was little changed at 112.97 per dollar.
The yield on 10-year Treasuries declined one basis point to 3.08 percent. Germany’s 10-year yield dipped one basis point to 0.53 percent. The UK’s 10-year yield fell three basis points to 1.6 percent.
West Texas Intermediate crude decreased 0.7 percent to $71.80 a barrel. Gold declined 0.6 percent to $1,194.58 an ounce.

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