Stocks near flat, yuan dips as China stimulus lift fades

By Caroline Valetkevitch

NEW YORK (Reuters) -Global stock indexes were little changed on Wednesday after reaching record highs this week, while the dollar hit a 14-month low against the euro as traders bet the Federal Reserve will make another large interest rate cut at its November meeting.

China's yuan gave back earlier gains, a day after China's central bank unveiled its biggest stimulus since the pandemic to pull the economy out of its deflationary funk and back towards the government's growth target.

The People's Bank of China cut medium-term lending rates to banks on Wednesday.

Expectations of another 50-basis point Fed rate cut at its November meeting jumped to more than 60% from 53% a day earlier, according to CME Group's (NASDAQ:CME ) FedWatch Tool.

Tuesday's data showing U.S. consumer confidence dropped by the most in three years in September added to worries about the labor market.

The U.S. central bank last week began an anticipated series of interest rate cuts with a large half-percentage-point reduction.

"The narrowing in the labor market differential, which is sort of indicative of demand and supply conditions in the employment market was a very bad omen for the U.S. economy," said Karl Schamotta, chief market strategist at Corpay in Toronto.

Investors will be watching this week for U.S. weekly jobless claims, due on Thursday, and the personal consumption expenditures price index, due on Friday.

Data released on Wednesday showed 0.716 million new homes were sold in August, compared to estimates of 0.7 million by economists in a Reuters survey.

The Dow Jones Industrial Average fell 173.89 points, or 0.41%, to 42,034.33, the S&P 500 rose 1.37 points, or 0.02%, to 5,734.30 and the Nasdaq Composite advanced 61.22 points, or 0.34%, to 18,135.74.

MSCI's gauge of stocks across the globe rose 0.14 points, or 0.02%, to 844.70. The STOXX 600 index fell 0.15%.

The dollar was last up 0.25% at 7.028 yuan in offshore trading. The Chinese currency earlier reached 6.9952, the strongest since May 2023.

The euro was last little changed at $1.1185 after reaching $1.1214, the highest since July 2023. The dollar index , which measures the greenback against a basket of currencies, was last up 0.41% at 100.64.



In Treasuries, the yield on benchmark U.S. 10-year notes rose 4.1 basis points to 3.777%, from 3.736% late on Tuesday.

Oil prices declined as investors considered whether China's latest stimulus plans will be enough to boost its economy and drive up fuel demand. U.S. crude fell 0.84% to $70.97 a barrel and Brent fell to $74.73 per barrel, down 0.59% on the day.

Source: Investing.com