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Bloomberg
US stocks extended gains, Treasuries rallied and the dollar tumbled after the Federal Reserve raised interest rates as expected while keeping steady its forecast that it will tighten a total of three times this year.
The S&P 500 Index rose 0.5 percent, while the yield on 10-year Treasury notes tumbled to 2.53 percent at 2:02 p.m. in New York. Gold climbed past $1,210 an ounce and the Bloomberg Dollar Spot Index slid 0.8 percent. West Texas Intermediate oil jumped above $48 a barrel after an industry report pointed to falling crude stockpiles.
The Fed raised its benchmark lending rate a quarter point and continued to project two more increases this year. Investors anticipated the tightening and Treasury yields had climbed with the dollar on speculation the central bank might signal a faster pace of tightening. Those trades unwound on Wednesday afternoon as the Fed indicated it hasn’t fallen behind with its efforts to keep inflation in check as economic growth shows signs of accelerating. The rate decision kicks off a two-day period brimming with central bank moves, European political drama and a raft of economic data. At the same time, oil’s recent swoon has investors weighing whether energy prices will touch off any market turbulence.
What investors will be watching:
Wednesday’s vote in the Netherlands will deliver a reading on the state of populism in Europe as races in France and Germany heat up. The Bank of Japan is set to keep its rates and yield-curve policy unchanged in its policy decision on Thursday. The Bank of England, Swiss National Bank and Bank Indonesia are also expected to stand pat with policy decisions. U.S. Secretary of State Rex Tillerson travels to Japan, South Korea and China in his first visit to the region since taking office. U.S. President Donald Trump’s first budget outline for fiscal 2018 is expected on Thursday. He’s said he’ll seek a $54 billion boost in defense spending, paid for by an equal amount of cuts to non-defense agencies.
Stocks
The S&P 500 added 0.7 percent to 2,381.24 at 2:15 p.m. in New York, adding to a gain of 0.3 percent before the 2 p.m. announcement. Energy shares led gains with a 1.7 percent rally as crude rebounded. Financial shares were the only one of 11 groups to retreat. The Stoxx Europe 600 Index added 0.4 percent as mining companies rallied 1.5 percent as a group.
Commodities
WTI gained 1.7 percent to $48.55. U.S. inventories fell by 531,000 barrels last week, the industry-funded American Petroleum Institute was said to report.
Currencies
The Bloomberg Dollar Spot Index slipped by 1 percent. The euro rose by 0.9 percent to $1.0694, following its 0.5 percent drop a day earlier.
Bonds
The yield on 10-year Treasury notes fell nine basis points to 2.51 percent, after slipping three basis points in Tuesday trading.
Asia
Stocks in Asia were mixed. Hong Kong shares pared declines as Chinese Premier Li Keqiang played down the risk of a trade conflict. Speaking at a press conference after the close of the annual National People’s Congress, Li said it’s important for both China and the U.S. to keep talking to build trust.