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U.S. stock prices rise and the dollar strengthens, as positive data counters central bank caution

U.S. stock prices rise and the dollar strengthens, as positive data counters central bank caution

The dollar strengthened and U.S. stock prices continued to rise as investors ignored cautionary notes from central bankers around the world about mounting economic uncertainty and U.S. president Donald Trump's unpredictable tariff policies.

The U.S. data revealed that jobless claims remained stable and existing home sales increased unexpectedly, helping to calm fears of a slowing economy, despite Wednesday's lower economic projections from the U.S. Federal Reserve.

The dollar gained strength and crude prices rose as signs of high demand offset simmering tensions from the Middle East.

The Bank of England (BoE), following the Fed, held its key interest rates at the same level. However, it warned against assuming that it would reduce rates in the future due to economic uncertainty.

The Swiss National Bank has cut its interest rate to almost zero, but expressed increasing concern over the global impact Trump's trade policy. Meanwhile, Sweden's central banks predicted that it will keep its current rates for the near future and be flexible in responding to global economic changes.

Paul Nolte is a senior wealth advisor & strategist at Murphy & Sylvest, located in Elmhurst. He says that Trump's actions and rhetoric have forced other nations to negotiate. What are the implications?" "There's a lot of dust in the atmosphere right now."

Nolte said that the situation was causing a great deal of concern on international markets. It's up to the bankers how they will react.

Turkey's central banks, however, increased its overnight lending rates to 46%, on an interim basis, after the lira plummeted following the arrest of President Tayyip Erdoan's principal political rival.

The Dow Jones Industrial Average rose by 216.53 or 0.52% to 42,181.83, while the S&P 500 gained 21.77 or 0.38% to 5,697.06. And the Nasdaq Composite rose by 87.69 or 0.50% to 17,839.05.

European stocks fell, as banks weighed on the market. Market participants were mulling over the cautionary note from BoE.

The FTSEurofirst 300 Index fell by 7.01 points or 0.32%.

The MSCI index of global stocks rose by 1.36 points or 0.16% to 846.73.

The pan-European STOXX 600 fell by 0.36%. Emerging market stocks dropped 3.43 points or 0.30% to 1,139.86. MSCI's broadest Asia-Pacific share index outside Japan fell by 0.2% to 592.74, while Japan's Nikkei dropped 93.54, or 0.25% to 37,751.88.

The dollar rose after the Fed said it wasn't in a hurry to lower its key policy rate. Meanwhile, the pound fell in response to the BoE decision to remain steadfast.

The dollar index (which measures the greenback in relation to a basket of currencies, including the yen, the euro and others) rose by 0.58%, reaching 103.98. However, the euro fell by 0.67%, falling to $1.0828.

The dollar gained 0.01% against the Japanese yen to reach 148.69.

Bitcoin gained 0.45% in value to $85,761.79. Ethereum fell 1.95% to $1.995.26.

The yields on U.S. Treasury bonds fell after Fed Chairman Jerome Powell said that the central banks is ready to act if there's an economic slowdown.

The yield on the benchmark 10-year U.S. notes dropped 4.8 basis points from 4.256% to 4.208% late Wednesday. The 30-year bond rate fell 4.9 basis point to 4.5175%, from 4.567% on Wednesday.

The yield on the 2-year bond, which is usually in line with expectations of interest rates for the Federal Reserve fell by 2.8 basis points, to 3.951% from 3.979% at late Wednesday.

The oil prices have reversed their initial losses after positive economic data from the United States and renewed tensions in Middle East.

U.S. crude climbed 1.55% to $68.20 per barrel. Brent rose 1.5% to $71.84 a barrel.

The gold price paused, after the metal that is a safe haven reached all-time highs in the morning session.

Gold spot fell by 0.28%, to $3.038.62 per ounce. U.S. Gold Futures increased 0.08%, to $3.038.20 per ounce.

(source: Reuters)