(Bloomberg) — U.S. stocks posted a two-day gain after Federal Reserve Chairman Jerome Powell reiterated his hawkish stance while signaling the central bank is “closer” to the end of a tightening cycle that pushed the rate from near zero to 4.5 : % from March.

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While the S&P 500 and Nasdaq 100 swung between gains and losses in Wednesday’s volatile session, both indexes ended lower after the Fed raised interest rates by half a percentage point and signaled more hikes are expected. Treasuries soared as the policy-sensitive two-year yield initially rose after the Fed’s decision, but almost completely erased that jump later in the day. The dollar exchange rate fell for the second session.

Powell said the Fed intended to continue its fight against inflation, as officials predicted interest rates would end next year at 5.1%. But his assertion that the cycle may be nearing an end was enough to offset the worst of the stock’s decline on Wednesday. The Fed also expects economic growth to slow next year and inflation to remain well above its 2% target.

Read more. Bond traders dismiss hawkish Fed tone and bet on 2023 rate cut

Read more. Powell says Fed still has “way to go” after half-point hike

“Powell was clear that the Fed is largely indifferent to interconference moves in financial conditions, but they monitor those conditions over time,” said Gerard McDonnell of 22V Research.

Some investors saw a silver lining in Powell’s words.

“The most encouraging of Powell’s comments is the realization that core inflation is coming down more than expected, as evidenced by new rental leases coming in well below the data used to calculate core CPI,” said Sit’s Senior Vice President Bryce Doty. Investment associations. “This is a big deal given that housing is the largest component of core CPI. Therefore, we would not be surprised if Powell uses this as a key reason to hold off on raising interest rates at the May meeting.”

After the Fed, the European Central Bank will announce its interest rate decision on Thursday. Markets will also grapple with decisions by the Bank of England and monetary authorities in Mexico, Norway, the Philippines, Switzerland and Taiwan.

This week’s main events:

  • China Medium Term Credit, Property Investment, Retail Sales, Industrial Production, Jobless Surveyed, Thursday

  • ECB rate decision and ECB President Lagarde’s briefing, Thursday

  • Rating Decisions UK BOE, Mexico, Norway, Philippines, Switzerland, Taiwan Thursday

  • US Cross-Border Investment, Business Inventories, Empire Manufacturing, Retail Sales, Initial Jobless Claims, Industrial Production, Thursday

  • Eurozone S&P Global PMI, CPI, Friday

Some major movements in the markets.

Shares

  • The S&P 500 was down 0.6% as of 4 p.m. New York time.

  • The Nasdaq 100 fell 0.8%

  • The Dow Jones Industrial Average fell 0.4%

  • The MSCI World index rose 1.1%

Currencies

  • The Bloomberg Dollar Spot index fell 0.3%

  • The euro rose 0.4% to $1.0679

  • The British pound gained 0.5% to $1.2424

  • The Japanese yen rose 0.2% to 135.26 per dollar.

Cryptocurrencies

  • Bitcoin was little changed at $17,772.42

  • Ether fell by 0.9% to $1,308.22

Bonds

  • The 10-year Treasury yield fell three basis points to 3.47%

  • Germany’s 10-year yield rose one basis point to 1.94%

  • UK 10-year yields rose one basis point to 3.31%

goods

  • West Texas Intermediate crude rose 2.7% to $77.42 a barrel.

  • Gold futures were down 0.3% at $1,819.90 an ounce.

This story was produced with the help of Bloomberg Automation.

–With assistance from Wildana Hajrich and Emily Grafeo.

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