Stocks climb as traders assess rate outlook; dollar eases vs yen
By Caroline Valetkevitch
NEW YORK (Reuters) -Global stock indexes edged higher while Treasury yields slipped on Wednesday as investors tried to assess the timing of possible interest rate cuts from the Federal Reserve, while the dollar eased off of a three-month peak against the yen.
Japan's top currency officials warned on Wednesday against what they described as rapid and speculative yen moves overnight.
Nvidia (NASDAQ:NVDA), whose shares were last up 1.4% and were helping to support the S&P 500 and Nasdaq, topped Alphabet (NASDAQ:GOOGL)'s market value to become the third-most valuable U.S. company.
Yields briefly extended declines after Chicago Fed President Austan Goolsbee said the Fed's path back to its 2% inflation target rate would still be on track even if price increases run a bit hotter than expected over the next few months, and the central bank should be wary of waiting too long before it cuts interest rates.
Market expectations for a cut by the Fed in June of at least 25 basis points stand at 78.5%, according to CME's FedWatch Tool, while expectations for a cut in May have fallen to 38.5%, down from 63.7% a week ago.
The latest shift in rate expectations came after an upside surprise in U.S. inflation on Tuesday that showed the consumer price index (CPI) rose 3.1% on an annual basis, above forecasts for a 2.9% increase.
With the CPI report, «it wasn't as if inflation held, it was that it accelerated, and that was what got the market. Suddenly the expectations (on possible rate cuts) pulled back even more,» said Quincy Krosby, chief global strategist at LPL Financial (NASDAQ:LPLA) in Charlotte, North Carolina.
«Every data release is now viewed through the eyes of the Fed. The market wants to know when is
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