(Adds US stocks, closing oil prices; updates prices throughout)
* US stocks rally on tech sector gains
* European stocks gain on strong earnings
* Benchmark 10-year U.S. Treasuries yield slips from multi-year highs
By Chris Prentice and Dhara Ranasinghe
WASHINGTON/LONDON, Feb 9 (Reuters) – Global equities rallied on Wednesday, with Wall Street rising again on a boost from big tech and European stocks gaining on strong earnings as investors put aside worries about rising interest rates for the time being.
The benchmark 10-year US Treasury yield fell from multi-year highs reached in the previous session, helping to stabilize sentiment in global markets and boost demand for growth stocks. The S&P 500 and Nasdaq Composite jumped more than 1% as tech stocks extended their rally.
The Dow Jones Industrial Average rose 0.86% to end at 35,768.06 points, while the S&P 500 gained 1.45% to 4,587.18.
The Nasdaq Composite climbed 2.08% to 14,490.37.
The pan-European STOXX 600 rose 1.7%, with automakers leading the gains with a jump of 4.0%. Volkswagen was among the main drivers of the index, up 6.1%, while its biggest investor, holding company Porsche, jumped 8.2%.
MSCI’s broadest index of Asia-Pacific stocks outside Japan rose 1.8% to a more than two-week high and the blue-chip Nikkei closed up just over 1%.
Investors were also reassured by positive headlines in recent days suggesting tensions between the West and Russia over Ukraine may ease and a string of upbeat earnings boosted sentiment towards the assets. at risk.
French President Emmanuel Macron, who met Russian President Vladimir Putin on Monday, said on Tuesday he believed steps could be taken to defuse the crisis in which Russia has massed troops near Ukraine, but said that she was not planning an attack.
Facebook owner Meta Platforms jumped more than 5%, ending four sessions of deep declines that shed nearly a third of its value. The biggest increases in the S&P 500 came from Nvidia, up 2.2%, and Microsoft, up 6.4%.
French fund manager Amundi reported a sharp rise in profits on Wednesday, British pharmaceutical company GSK’s quarterly results beat forecasts and Dutch bank ABN Amro announced a better-than-expected net profit of 552 million euros for the fourth trimester.
“The past few days have seen positive headlines on Russia/Ukraine with negotiations between Macron and Putin and reports of German efforts to de-escalate the crisis,” said Mohit Kumar, managing director, interest rate strategy, Jefferies.
“But we remain of the view that a bigger concern for risky assets is the removal of central bank accommodative measures, as markets have become accustomed to ample liquidity and low rates for a long time.”
Major central banks have become more hawkish in the face of stiffer-than-expected inflation, pushing bond yields higher.
The European Central Bank could raise rates this year, new Bundesbank President Joachim Nagel said in an interview with the newspaper.
Barring any big surprises, Thursday’s U.S. consumer price index should cement expectations that the Federal Reserve will raise rates next month, with a solid print providing additional support for those forecasting a bigger rate hike. 50 basis points.
Japan’s 10-year bond yield fell from a session high of 0.215%, its highest since January 2016. But after strong selling, broader bond markets stabilized with prices rising and yields falling. decrease.
The two-year US Treasury yield hit its highest level since February 2020.
“Our economists expect the Fed to hike five times this year, three times in 2023 and twice in 2024,” Goldman Sachs said in a research note.
“We have revised our US Treasury yield forecast up to reflect the economic backdrop and the Fed’s hawkish turn. We now see 10-year UST yields ending this year at 2.25% (vs. 2% previously), and next year at 2.45% (up from 2.3%).”
The yield on the 10-year German Bund was down that day at 0.23%.
“I would say this movement in bonds has been overdone. The speed has been so fast since Thursday that a correction was due,” said Piet Haines Christiansen, chief strategist, Danske Bank. “We still have the US CPI tomorrow, so let’s see what happens after that.”
The ECB’s hawkish stance last week left Bund yields on course for their biggest monthly rise in a year.
Rising borrowing costs and signs of rate normalization in Europe have boosted bank stocks – a sub-index of European bank stocks is at its highest since 2018, rising sharply since Thursday’s ECB meeting.
In currency markets, the dollar index lost ground against six peers, trading down 0.06% at 4:28 p.m. EST.
The euro rose 0.1%, stabilizing after a three-week high, after European Central Bank President Christine Lagarde cut bets for aggressive interest rate hikes.
The yen lost 0.03% for the last time.
Oil prices rallied after U.S. crude inventories fell nearly 5 million barrels and demand for fuel hit a record high, underscoring continued market tightness.
Brent crude futures rose 77 cents, or 0.9%, to $91.55 a barrel. U.S. West Texas Intermediate (WTI) crude ended up 30 cents at $89.66 a barrel.
Gold prices were higher on Wednesday as a weaker dollar offered support for the safe-haven metal ahead of US inflation data. US gold futures rose 0.5% to $1,836.60.
Spot prices rose 0.38%.
(Reporting by Chris Prentice Additional reporting by Noel Randewich; Editing by Nick Zieminski and Alistair Bell)