Stocks remain steady, and the dollar gains as investors ponder Fed rate cuts. Wednesday saw global stocks trading at three-month highs and the dollar gaining ground as investors reduced their initial excitement over the possibility of an increase in U.S. interest rates.

Following the downturn on Wall Street, the MSCI All-World index (.MIWD00000PUS) dropped 0.1% for a second day as the minutes from the Federal Reserve’s most recent meeting provided little fresh information on the policymakers’ thoughts on interest rates.

The S&P 500 (SPX) lost 0.2% of its gains the previous night. After the market closed, chipmaker Nvidia (NVDA.O) revealed revenue far higher than Wall Street forecasts, but shares dropped 1.7% due to the company’s pessimistic sales forecast for China.

In European trading, Nasdaq futures dropped by 0.3%, whereas S&P 500 futures decreased by just 0.1%. Due to Thursday’s American Thanksgiving holiday, volumes will probably be low for the remainder of the week.

“The market is currently consolidating, especially ahead of the Thanksgiving holiday. As such, we wouldn’t anticipate any significant movements in the near future,” stated Fiona Cincotta, a market strategist at City Index.

The Fed minutes did not reveal that policymakers had ruled out more rate hikes. Still, they did contain a vow by policymakers to “proceed carefully” from this point on, which traders did not perceive as new information.

“They were unable to remove that from the discussion entirely. According to Cincotta, that would have resulted in a more significant market shift.

“That’s where we are in the market – broadly speaking, it’s supportive of stocks and broadly speaking, unsupportive for the U.S. dollar,” she stated. The dollar index gained ground today, increasing for the second straight day, but it is still headed for its worst monthly performance in a year—a 2.7% decline.

In contrast, the MSCI global equities index is up 8.2% in November, reaching its highest level since mid-August and its most significant monthly increase since late 2020.

The yield on the ten-year Treasury was 4.41%, somewhat lower. Since the Fed maintained rates stable early in the month, they have decreased by roughly 50 basis points. Interest rate futures markets price in roughly 90 basis points of rate reductions through 2024, with a 30% possibility that they start as early as March and nearly no likelihood that the Fed will increase again.

Philip Marey, senior U.S. strategist at Rabobank, stated, “It would be foolish to risk it by hiking further than necessary, since the (Fed) believes that a soft landing is in sight.”

“Longer-term rates are probably going to rise again and take the place of a rate hike if we get better inflation and economic statistics before the December meeting. As a result, we do not anticipate more increases.”

FUTURES OF THE YEN

About currencies, the dollar recovered from multi-month lows versus several other currencies, which it had been declining against since last week’s positive U.S. inflation report.

It was up 0.5% vs the yen at 149.13 yen and slightly firmer against the euro at $1.0897. Capital Economics senior economist Jonathan Petersen said, “We expect bond yield gaps to remain a tailwind for the yen and renminbi as inflation in the U.S. continues to moderate and investors discount more rate cuts from the Fed.”

After rising 2% over the previous week, the value of the Chinese yuan fell 0.2% to $7.1575 against the U.S. dollar.

According to two sources who spoke to Reuters on Tuesday, China’s central state-owned banks have been purchasing yuan to speed up its recent recovery.

Later in the day, British Finance Minister Jeremy Hunt will deliver his autumn budget, which is anticipated to include proposals for company tax breaks. Investors will closely observe the impact of any giveaways on the UK’s borrowing plans, as it may affect the value of the pound and the yield on government bonds.

At 1.2525 against the dollar and 87.12 pence against the euro, the pound was down 0.1% and 0.1%, respectively. In the commodities market, copper prices dropped 0.5% to $8,404 a ton after hitting a two-month high on Tuesday, and Brent crude futures declined 0.4% to $82.17 a barrel.

After Binance CEO Changpeng Zhao resigned and entered a guilty plea to violating U.S. anti-money laundering rules as part of a $4.3 billion settlement that ended a years-long investigation into the cryptocurrency exchange, Bitcoin rebounded 2.2% to $36,573, from an overnight low of $35,651.

After plunging over 10% the day before in the most significant one-day decline of the year, Binance’s token was up 5.3% at $237.30.