By Caroline Valetkevitch
NEW YORK (Reuters) -Global stock indexes mostly eased on Wednesday with energy shares, while U.S. Treasury yields rose as investors stuck to the view that the Federal Reserve will be able to create a soft landing for the U.S. economy.
China’s yuan gave back earlier gains a day after China’s central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk and back towards the government’s growth target.
In the U.S., Wednesday’s data that showed new home sales falling in August had little impact on markets. Data on Tuesday showing U.S. consumer confidence dropped by the most in three years in September added to worries about the labor market.
The U.S. central bank last week began an anticipated series of interest rate cuts with a large half-percentage-point reduction.
Expectations of another 50-basis point Fed rate cut at its November meeting jumped to about 60% from 53% a day earlier, according to CME Group’s FedWatch Tool.
“We’re seeing yields trend broadly higher, which is a little counter-intuitive at the start of the Fed cutting cycle,” said Chip Hughey, managing director of fixed income at Truist Advisory Services in Richmond, Virginia.
Investors will be watching this week for U.S. weekly jobless claims, due on Thursday, and the personal consumption expenditures price index, due on Friday.
The S&P 500 energy index was down 1.9%, with oil prices also lower.
The Dow Jones Industrial Average fell 244.66 points, or 0.58%, to 41,963.56, the S&P 500 fell 9.36 points, or 0.16%, to 5,723.57 and the Nasdaq Composite rose 4.92 points, or 0.03%, to 18,079.45.
MSCI’s gauge of stocks across the globe fell 1.53 points, or 0.18%, to 843.03. The STOXX 600 index fell 0.11%.
The dollar was up 0.25% at 7.028 yuan in offshore trading. The Chinese currency earlier reached 6.9952, the strongest since May 2023.
The dollar index, which measures the greenback against a basket of currencies, rose 0.66% to 100.89, with the euro last down 0.39% at $1.1136. Against the Japanese yen, the dollar strengthened 1.01% to 144.66.
In Treasuries, the yield on benchmark U.S. 10-year notes rose 4.1 basis points to 3.777%, from 3.736% late on Tuesday.
Oil prices declined as supply disruptions concerns in Libya eased. U.S. crude fell $1.87 to settle at $69.69 a barrel and Brent fell to $73.46 per barrel, down $1.71 on the day.
Spot gold rose 0.1% to $2,659.25 an ounce.
(Additional reporting by Tom Wilson in London and Gertrude Chavez-Dreyfuss in New York; Editing by Chizu Nomiyama, Richard Chang and Nick Zieminski)
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