Stocks Rally, Dollar Falls As Market Bets On Rate Hike Easing

US equities rose sharply and the dollar lost ground as investors bet the Federal Reserve would slow interest rate hikes following its announcement on Wednesday of an increase in rates in line with expectations, Sinéad Carew and Sujata Rao reported for Reuters.

Photo Insert: Ten-year US Treasury bond yields - the reference rate for the global cost of capital - were volatile but pared most of their declines.

Oil futures settled higher after a report of lower inventories in the US, while cuts in Russian gas flows to Europe offset concerns about weaker demand and higher US interest rates.

Ten-year US Treasury bond yields - the reference rate for the global cost of capital - were volatile but pared most of their declines after Fed Chair Jerome Powell spoke to reporters following the central bank's increase of its benchmark overnight interest rate by three-quarters of a percentage point.

While most asset classes chopped around after the Fed Statement came out at 2 p.m. ET (1800 GMT, 2 a.m. Thursday, July 28, 2022, in Manila), stocks rose sharply as Powell spoke and Treasury yields took a dive before regaining ground.

The Dow Jones Industrial Average rose 436.05 points, or 1.37%, to 32,197.59, the S&P 500 gained 102.56 points, or 2.62%, to 4,023.61 and the Nasdaq Composite added 469.85 points, or 4.06%, to 12,032.42. MSCI's gauge of stocks across the globe gained 1.71%.

A complete cut-off of Russian gas to Europe by year-end and a further 30% drop in oil exports may lead to virtually zero European and US growth next year, the IMF warned. In energy markets, US crude settled up 2.4% at $97.26 per barrel and Brent settled at $106.62, up 2.13% on the day. Spot gold added 1.0% to $1,734.14 an ounce.

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