GLOBAL MARKETS-Stocks gain ground, Treasury yields pull back after Powell statement

BY Reuters | TREASURY | 11/30/22 02:24 PM EST

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Graphic: Global asset performance http://tmsnrt.rs/2yaDPgn

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Graphic: World FX rates http://tmsnrt.rs/2egbfVh

(Updates prices, adds commentary)

By Sin?ad Carew and Dhara Ranasinghe

LONDON, Nov 30 (Reuters) - Wall Street equities rose on Wednesday while U.S. Treasury yields pared gains and the dollar lost ground after Federal Reserve Chair Jerome Powell said the central bank could slow the pace of interest rate hikes "as soon as December", even as he cautioned that inflation was still too high.

His words appeared to soothe investors who were fearing a more hawkish statement even as Powell warned that the fight against inflation was far from over and that key questions remain unanswered, including how high rates will ultimately need to rise and for how long.

"The market is taking this glass-half-full, it could've been worse approach. Powell didn't really say anything that new," said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute in Charlotte, North Carolina.

"The path of least resistance since the last inflation number has been higher. There's momentum to the upside in place until something outright stops it," said Samana.

"Policy continues to tighten. People are just not appreciating it," he added, noting that even if the Fed were to pause rate hikes it is still shrinking the balance sheet which he sees as "almost as important if not more important than the level of rates."

The Dow Jones Industrial Average rose 210.82 points, or 0.62%, to 34,063.35, the S&P 500 gained 48.55 points, or 1.23%, to 4,006.18 and the Nasdaq Composite added 228.54 points, or 2.08%, to 11,212.32.

MSCI's gauge of stocks across the globe gained 1.19%. Emerging market stocks rose 2.06%.

In Treasuries, Benchmark 10-year notes were down 3.9 basis points to 3.709%, from 3.748% late on Monday. The 30-year bond was last down 1.1 basis points to yield 3.7912%, from 3.802%. The 2-year note was last down 4.5 basis points to yield 4.4277%, from 4.473%.

In currencies, the dollar index fell 0.533%, with the euro up 0.46% to $1.0374.

The Japanese yen strengthened 0.35% versus the greenback at 138.23 per dollar, while sterling was last trading at $1.2011, up 0.49% on the day.

Oil prices were rallying on Wednesday on signs of tighter supply, a weaker dollar and optimism about a potential recovery of demand in China.

U.S. crude rose 3.04% to $80.58 per barrel and Brent was at $85.41, up 2.87% on the day.

(Reporting by Sin?ad Carew in New York, Dhara Ranasinghe, Marc Jones and Amanda Cooper in London; additional reporting by Kane Wu in Hong Kong, editing by Chizu Nomiyama and Elaine Hardcastle)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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