GLOBAL MARKETS-Stocks retreat from record high, dollar higher after Fed keeps rates steady

(Updates with Fed policy statement)

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Dollar steadies after sharp drop

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S&P 500 crosses 7,000 level

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Fed keeps rates steady as expected

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Meta, Tesla report earnings after the close

By Chuck Mikolajczak

NEW YORK, Jan 28 (Reuters) - Global stocks were on pace to snap a five-session streak of gains on Wednesday, while the U.S. dollar held on to gains after the Federal Reserve kept rates steady, as widely expected. In keeping rates unchanged, the Fed cited still-elevated inflation alongside solid economic growth, and gave little indication in its latest ?policy statement of when borrowing costs might be reduced again.

Investors will now turn to comments from Chair Jerome Powell, whose term ends in May, for clues on the path of interest rates. U.S. stocks ?showed little reaction to the Fed statement, with the S&P 500 posting slight losses after crossing above 7,000 for the first time ahead of ?earnings from megacap companies Microsoft (MSFT), Tesla and Meta Platforms (META) after the closing bell, while results from Apple (AAPL) are due ?on Thursday.

"The Fed didn't rock ?the boat. It was widely expected that they'd be on pause. The reality is we probably don't see any cuts until Powell is out of the Fed sometime after May," said Ryan ?Detrick, chief market strategist at Carson Group in Omaha.

"They did cite some ?positives on the labor market front, but clearly inflation is a worry. Just look at the soaring commodity prices we've been seeing recently."

The Dow Jones Industrial Average rose 24.74 points, or 0.05%, to 49,028.15, the S&P 500 fell 4.39 ?points, or 0.06%, to 6,974.21 and the Nasdaq Composite rose 28.14 points, or ?0.12%, to 23,845.24.

MSCI's ?gauge of stocks across the globe fell 0.73 points, or 0.07%, to 1,050.35 after climbing to an intraday record of 1,055.04, marking its third straight intraday record. The pan-European STOXX 600 index closed down 0.75%, weighed by a drop of about 8% in LVMH after ?the Louis Vuitton and Tiffany owner reported quarterly results, but CEO Bernard Arnault said he was cautious about the year ahead.

FX WATCH The dollar showed signs of steadying after its biggest daily percentage drop since August 1, as U.S. President Donald Trump on Tuesday seemed to shrug off its recent weakness, sending the greenback to a four-year low.

The dollar has stumbled recently on expectations of continued Fed rate cuts this year, tariff uncertainty, policy volatility, including threats to the central bank's independence, and rising fiscal deficits, all of which have dented investor confidence in U.S. economic stability. The dollar index, ?which measures the ?greenback against a basket of currencies, rose 0.79% to 96.66, with the euro down 1.07% at $1.1911 after breaching the $1.20 mark following Trump's comments. European Central Bank policymakers flagged increasing concerns over the euro's quick appreciation against the dollar, warning it could drag inflation down even ?as price growth is already set to undershoot the ECB's 2% target.

The Fed meeting comes as the Trump administration continues a criminal investigation of Powell, an evolving effort to fire Fed Governor Lisa Cook, and the nomination of a new chief. Markets are not pricing in more than a 50% chance of a rate cut until the central bank's June meeting, according to CME's FedWatch Tool.

Against the Japanese yen, the dollar strengthened 1.08% to 153.84, while sterling weakened 0.56% to $1.3768. The United States has a strong dollar policy and that means setting the right fundamentals, U.S. Treasury Secretary Scott Bessent said, while denying that the U.S. was intervening in currency markets ?to support the yen after the Japanese currency surged against the greenback last week. The recent dollar weakness has given support to other commodities, helping gold hit a record above $5,300 an ounce. U.S. crude rose 1.07% to $63.07 a barrel, and Brent climbed to $68.27 per barrel, up 1.04% on the day after hitting a four-month high of $68.53.

(Reporting by Chuck Mikolajczak, additional reporting by ?Pranav Kashyap and Twesha Dikshit in Bengaluru, Dhara Ranasinghe in London and Tom Westbrook in Singapore; Editing by Timothy Heritage, Jan Harvey, Alexander Smith, Rod Nickel)