The New York market saw the dollar strengthen and U.S. Treasury yields rise, while the S&P 500 remained nearly flat. Higher oil prices and expectations for further Fed rate hikes drove markets.
In foreign exchange markets, the dollar rose against major currencies, with USD/JPY reaching 158.82 yen late in the session. Hawkish comments from Fed officials and the strength of the U.S. economy provided the backdrop, weighing on the yen. Market expectations of possible intervention or other action by the Bank of Japan also affected sentiment.
Treasury yields rose. The 30-year yield held near 5.47%, the 10-year yield at about 5.18%, and the 2-year yield at about 4.91%, with yields at elevated levels across the curve. Expectations for Fed rate hikes and market concerns about inflation provided the backdrop.
In equities, the S&P 500 ended trading nearly flat, with individual stocks moving in different directions, including Microsoft, which was weak, and META and AMD, which rose. Rising oil prices also prompted moves in related stocks.
In oil markets, North Sea Brent futures rose more than 3%, while WTI futures gained about 2.7%. Supply concerns were revived by an attack on Saudi Arabia by a Yemen-based pro-Iranian armed group. The U.S. Treasury's Treasury buyback operation also contributed to the rise in yields. Government and market participants are pricing in at least a 0.25% rate hike at the Fed's next FOMC meeting.
Against this backdrop, comments from Fed officials after the FOMC meeting and reports from Reuters on progress in talks between the United States and Iran affected market sentiment, with the dollar index rising to around 101.28 late in the session.