U.S. stocks closed mixed as Wall Street continued to assess Federal Reserve Chair Janet Yellen’s speech on the country’s economy.
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The FTSE 100 index of leading British shares was up a more modest 0.5 percent at 6,304.
The chair of the Federal Reserve Janet Yellen has said a United Kingdom vote to leave the European Union could have “significant economic repercussions” in the U.S. and will affect the Fed’s decision to raise interest rates.
After the rather dismal non-farm payrolls report release on June 3, 2016, many expected Fed chair Janet Yellen to take a June rate hike completely off the table.
Yellen’s comments boosted also Wall Street on Monday, with the S&P 500 stocks index reaching a seven-month high following a 0.5-percent gain.
Yet, in her speech, Yellen said, “One should never attach too much significance to any single monthly report”, adding that additional timely indicators from the employment report were “more positive”.
To some investors, the absence of a timeframe in Monday’s speech suggested the Fed would delay its next rate hike well beyond next week, when USA central bankers gather to make monetary policy.
The dollar’s weakness saw the euro gain 0.2 percent to $1.1375. “While the message Yellen wants to give across is that she still wants to move rates higher, the timing of subsequent rate hikes is murky”.
Among the factors that might persuade the Fed against raising interest rates next week are slowing job creation and U.S. economic growth as well as uncertainty about the UK’s potential exit from the European Union (Brexit) and a slowdown in China’s economy. Hong Kong’s Hang Seng Index advanced 1.4 percent to 21,329.95.
Over the last decade, interest rates have increased only by 0.25 percentage points.
US crude futures CLc1 last traded at $50.39 per barrel, near its Tuesday high of $50.53, a level last seen in October.
On Tuesday, the U.S. dollar was unchanged against the euro at $1.1358 and to Yen, it lost 0.2 percent at 107.37.
Dow e-minis were up 45 points, or 0.25 percent at 8:15 a.m. ET, with 18,048 contracts changing hands.
In commodities trading, crude oil futures are climbing $0.48 to $50.17 a barrel after jumping $1.07 to $49.69 a barrel in the previous session.
The dollar declined against most major currencies as traders took Federal Reserve Chair Janet Yellen’s latest words to mean USA policy makers aren’t in a hurry to raise interest rates.
World stocks hit their highest in five weeks on Tuesday as a dovish tone from Janet Yellen cooled near-term USA rate hike bets and a 2016 peak in crude prices cheered oil firms.
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Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.03% to 881.15 tonnes on Monday.
