Global stock indexes rise, U.S. Treasury yields drop

Traders have pushed back expectations of the Fed's first rate cut to May, after previously pricing in a likely rate cut in March

Global stock indexes rose on Tuesday while U.S. Treasury yields dropped as investors looked for more hints on how soon the Federal Reserve may start cutting interest rates.

Overnight, Beijing ramped up efforts to put a floor under its stock market, boosting Chinese blue-chip stocks over 3%. In New York trading, the iShares China large-cap exchange trade fund rallied as well as the Golden Dragon China index. The U.S. dollar weakened marginally but stayed near its highest level in almost three months in the wake of recent strong economic data and the Fed's hawkish stance on rates.

Traders have pushed back expectations of the Fed's first rate cut to May, after previously pricing in a likely rate cut in March.

Now traders are wondering if instead of whether we'll get a soft landing or recession, whether we could have no landing or re-acceleration this year, said Matthew Weller, global head of research at FOREX.com.

Investors on Wall Street also digested quarterly results and forecasts from U.S. firms. Eli Lilly forecast 2024 profit above estimates. The Dow Jones Industrial Average (DJIA) gained 141.24 points, or 0.37%, to 38,521.36, the S&P 500 added 11.42 points, or 0.23%, to 4,954.23 and the Nasdaq Composite advanced 11.32 points, or 0.07%, to 15,609.00.

The MSCI world equity index added 0.51%. Benchmark 10-year notes declined to 4.09%, after hitting an 11-day high of 4.177% on Monday.

The dollar index was 0.3% lower at 104.17.

A number of announcements from China's securities regulator, a reported upcoming meeting between President Xi Jinping and financial regulators underlined the urgency with which Chinese authorities are trying to stem heavy losses in its stock market. State fund Central Huijin Investment also said it has expanded its scope of investment in exchange trade funds.

The 3.5% gain in Chinese stocks was that market's biggest one-day percentage gain since 2022, while Hong Kong's Hang Seng Index gained 4%, its most in a day in six months. China's blue-chip index slumped to a five-year low last week on the back of the country's ailing economy, which had prompted state-backed investors to step up their buying of blue-chip stock tracking index funds to support the market.