Stocks fluctuate, dollar drops ahead of Fed’s policy meeting

Bloomberg

US stocks swung between gains and losses, the dollar weakened and Treasuries steadied as traders await the Federal Reserve’s first policy decision since Jerome Powell took the helm.
The S&P 500 Index fluctuated, while the Dow Jones Industrial Average and Nasdaq Composite Index edged lower. Leisure companies and banks were among the biggest losers in the Stoxx Europe 600 Index, following a mixed performance in Asian equities.
An index tracking the dollar’s value against trading partners dropped the most in two weeks. Gold climbed and oil advanced on renewed tension between producers Saudi Arabia and Iran.
“Whether we have three or four rate hikes this year shouldn’t be that big of a difference to the economy, but it will have a big impact on market prices and market psychology,” said Chris Zaccarelli, chief investment officer of the Independent Advisor Alliance.
Investor focus was expected to turn to Powell’s first Federal Open Market Committee meeting as Fed chairman, with close scrutiny of whether monetary policy might become more hawkish under his tenure. Shares in technology-related firms remain on the back foot due to the spillover from the crisis engulfing Facebook Inc. CEO Mark Zuckerberg will address employees of the social network on Friday.
European bonds fell and the pound extended its advance after data on stronger wage growth, and before a Bank of England policy meeting.
Elsewhere, the three-month dollar London interbank funding rate continued its advance, rising to 2.27 percent on Wednesday, the highest since November 2008. Yields on UK 10-year government bonds extended their gain after data showed wages are rising in Britain at their fastest pace since the end of 2016.
The Bank of England is expected to keep interest rates and its asset-purchase program unchanged on Thursday. Attention will be on language and the odds for a May hike. New Zealand has a monetary policy decision on Thursday. Company earnings scheduled for this week include Tencent, Hermes, PetroChina and Nike.
The S&P 500 Index fell 0.1 percent in New York, while the Dow Jones Industrial Average was flat and the Nasdaq Composite Index dipped 0.2 percent. The Stoxx Europe 600 Index gained 0.5 percent and the MSCI Asia Pacific Index decreased 0.2 percent.
The UK’s FTSE 100 Index dipped 0.5 percent to the lowest in 15 months. The MSCI Emerging Market Index rose 0.4 percent, the first increase in five days.
The Bloomberg Dollar Spot Index declined 0.4 percent, the largest drop in more than two weeks. The euro advanced 0.3 percent to $1.2275. The British pound jumped 0.4 percent to $1.4051, the strongest in almost five weeks. The Japanese yen gained 0.3 percent to 106.26 per dollar. The MSCI Emerging Markets Currency Index was little changed.
The yield on 10-year Treasuries gained one basis point to 2.90 percent, reaching the highest in almost four weeks on its fifth straight advance. Germany’s 10-year yield advanced one basis point to 0.59 percent, the highest in more than a week. Britain’s 10-year yield climbed five basis points to 1.494 percent, the highest in more than three weeks on the largest increase in more than three weeks.
West Texas Intermediate crude increased 0.9 percent to $64.09 a barrel, the highest in almost seven weeks. Gold 0.4 percent to $1,316.20 an ounce, the biggest rise in more than two weeks. LME copper fell 0.7 percent to $6,707.00 per metric ton, hitting the lowest in 14 weeks with its fifth consecutive decline.