Stocks dip while U.S. crude gains on China hopes
- Wall Street equities, MSCI global index in the red
- Oil prices rebound on China hopes
- Dollar makes a little progress in choppy session
- U.S. 10-year Treasury yields rise
Wall Street lost ground on Tuesday as investors awaited guidance on the Federal Reserve's interest rate hiking path, while U.S. oil futures settled higher on hopes that China would loosen COVID-19 restrictions that had fueled fears about the global economy.
The Australian dollar bounced back on Tuesday as investors hoped China would ease COVID restrictions after Chinese health officials discussed speeding up COVID vaccinations for elderly people. The yen strengthened against the dollar, and the euro lost ground.
After similar messages from other Fed officials on Monday, investors were warily awaiting Wednesday's appearance by Fed Chair Jerome Powell, who earlier this month had dashed hopes of policy easing when he spoke to reporters after a Fed meeting.
"Investors rare hedging against what could be a hawkish reiteration of his press conference comment. That could cast some cold water over recent market rallies," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
However, weakening consumer confidence may have marginally helped to soften Treasury yields, weaken the dollar and boost stocks as investors viewed it as "ammunition for the Fed to soften its hawkish impulse," the strategist added.
The Dow Jones Industrial Average DJI fell 50.35 points, or 0.15%, to 33,799.11, the S&P 500 SPX lost 12.5 points, or 0.32%, to 3,951.44 and the Nasdaq Composite IXIC dropped 79.10 points, or 0.72%, to 10,970.40.
Benchmark 10-year notes US10Y were up 4.4 basis points to 3.746%, from 3.702% late on Monday. The 30-year bond (US30YT=RR) was last up 5.4 basis points to yield 3.8032%, from 3.749%. The 2-year note (US2YT=RR) was last was up 0.2 basis points to yield 4.4732%, from 4.471%.
"It's going to be a busy second half of the week with all the data points we're expecting. But the main focus will be on inflation and jobs," said Subadra Rajappa, head of U.S. rates strategy, at Societe Generale in New York.
The Japanese yen strengthened 0.22% versus the greenback at 138.63 per dollar, while sterling GBPUSD was last trading at $1.1951, down 0.06% on the day.
The Aussie AUDUSD was last up 0.53% against the dollar after earlier rising as much as 1.4%.
Oil prices climbed on hopes for a relaxation of China's strict COVID-19 controls, which had fueled demand concerns.
rose with help from the dollar's retreat and hopes for less aggressive U.S. rate hikes going forward.
Spot gold GOLD added 0.5% to $1,750.10 an ounce. U.S. gold futures (GCc1) gained 0.50% to $1,749.00 an ounce.