S&P 500 closes at record as yields rise, dollar retreats

US stock market: Global equities climbed to a more than two-year peak and the S&P 500 closed at a record high on Wednesday, as strong earnings offset jitters related to US regional banks and China's markets.

Bonds yields rose as comments from Federal Reserve officials reaffirmed expectations that the central bank may not cut rates soon. The US dollar retreated and oil prices rose.
The MSCI world equity index (.MIWD00000PUS), opens new tab, which tracks shares in 49 countries, gained 0.59 per cent after hitting its highest since mid-January 2022.

On Wall Street, the Dow Jones Industrial Average (.DJI), opens new tab rose 175.88 points to 38,697.24, the S&P 500 (.SPX), opens new tab gained 39.93 points to 4,994.16 and the Nasdaq Composite (.IXIC), opens new tab added 140.80 points to 15,749.80.

The S&P 500 .SPX closed at its highest level ever, lifted by optimism about earnings following quarterly reports from Chipotle Mexican Grill (CMG.N), opens new tab and Ford Motor (F.N), opens new tab.
"We are at the midpoint of the 4Q earnings reporting season, and we would say that there has been more good news than bad," Arthur Hogan, chief market strategist with B. Riley Wealth, said in a market note.

The US regional banking sector remained a concern as Moody's downgraded New York Community Bancorp (NYCB.N), opens new tab to junk citing pressure on its funding and liquidity. The KBW regional banking index (.KRX), opens new tab pared losses but still ended lower and is down more than 5 per cent so far this month.

Chinese regulators continued efforts to steady markets, placing further curbs on short selling and state investors said they were expanding their stock buying plans. President Xi Jinping will discuss the stock market with financial regulators, Bloomberg News reported.

The head of China's securities regulator was replaced on Wednesday, according to Xinhua news agency, as policymakers struggle to stabilize the country's main stock indexes.

"We're looking at more than $5 trillion being wiped out from the equity markets. Clearly, they want to stem those losses, they want to introduce and change and they're trying to be a lot more forceful about it," said Aneeka Gupta, equity strategist at wisdomtree.

In Europe, equities ended lower as weakness in banking shares weighed, while losses in energy heavyweights Equinor and TotalEnergies following corporate updates only compounded the fall.

The pan-European STOXX 600 index (.STOXX), opens new tab closed 0.3 per cent lower, with shares in Spain (.IBEX), opens new tab lagging regional peers and retreating 1.2 per cent.
MORE FED SPEAKERS

Federal Reserve regional presidents Loretta Mester and Neel Kashkari welcomed the progress on inflation but signaled there was more work to do before policy could be eased.

"The events of the last few days (have) seen markets try and absorb the fact that rate cuts might have to wait until much later in the year, and what any delay means for asset prices and valuations," CMC Markets chief market strategist Michael Hewson said.

Fed Chair Jerome Powell on Sunday said the central bank could be "prudent" on the timing of rate cuts. The probability of a US rate cut as early as May now stands at just 39 per cent, when it was considered a done deal only a week ago.

The dollar index , which tracks the currency against a basket of major currencies, was down at 104.04. The yield on benchmark 10-year Treasury notes rose to 4.1172 per cent from 4.092 per cent previously. The two-year yield , which rises with traders' expectations of higher Fed fund rates, climbed to 4.4329 per cent from 4.408 per cent.

Oil prices gained after data showed US crude inventories grew less than expected and as tensions rose in the Middle East. Brent crude futures settled up 0.79 per cent at $79.21 a barrel and US crude climbed 55 cents, or 0.75 per cent to $73.86. Spot gold prices were down 0.08 per cent as US gold futures settled mostly unchanged at $2051.70.