The FOMC noted that the path of recovery will depend on the virus
Wall Street stocks finished mixed overnight despite the Fed’s dovish tone and upbeat corporate results. The Federal Reserve kept its accommodative monetary policies and signaled that economic recovery was on track. At the same time, the central bank noted that the path of recovery will depend on the virus. The benchmark S&P 500 shed just 0.02%, the Dow Jones Industrial Average lost 0.36%, and the Nasdaq added 0.70%.
Asian stocks rallied on Thursday after the Federal Reserve kept its accommodative monetary policies. Of note, Chinese technology giants led the way this time. Chinese internet shares had slid earlier this week on reports that Beijing was considering restrictions on for-profit education ventures. As a result, Tokyo’s Nikkei 225 gained 0.73%, while the Kospi in South Korea was 0.13% higher. The Hang Seng in Hong Kong jumped 2.7%. The Shanghai Composite Index rebounded 1.56% after three days of declines. Sydney’s S&P/ASX 200 added 0.45%.
IN Europe, equities opened higher to hit record highs due to a series of positive corporate earnings along with Fed’ dovish rhetoric. In individual stocks, Royal Dutch Shell rose over 3% after the company raised its dividend by almost 40% and said it will buy back $2 billion of shares.
In currencies, the USD index came under pressure to settle around 92.25 on Thursday following the Fed’s rejection to discuss tapering. Following the FOMC announcement, the US Fed Funds Futures show the market is fully pricing in a 25 basis-point tightening by March 2023. EUR/USD is hovering around 1.1875, the highest in two weeks. The pair has been climbing for the fifth day in a row, targeting the 1.1900 figure. The first release of US GDP is in the spotlight today.
Elsewhere, oil prices keep a bullish bias, flirting with two-week highs around $74.30. The market is buoyed by a weekly decline in U.S. crude inventories and ongoing strength in implied demand for gasoline. The Energy Information Administration reported on Wednesday that U.S. crude inventories fell by 4.1 million barrels for the week ended July 23. The EIA also reported weekly supply declines of 2.3 million barrels for gasoline and 3.1 million barrels for distillates.
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