By Chuck Mikolajczak
NEW YORK (Reuters) -A gauge of global stock markets edged lower and U.S. Treasury yields rose modestly on Wednesday, as investors looked to the next round of data on inflation and consumer health for clues on the direction of Federal Reserve policy.
The S&P 500 fell slightly from its record close, weighed down by weakness in the tech sector. In the prior session, stocks had shaken off a slightly hotter-than-expected reading on U.S. consumer inflation (CPI), with the benchmark S&P index also getting a lift from a surge in shares of Oracle (NYSE:ORCL) after its quarterly earnings.
The inflation data did little to alter expectations that the Federal Reserve will cut interest rates by at least 25 basis points (bps) at its June meeting, but gave a boost to U.S. Treasury yields, a trend which continued on Wednesday.
"We think it's super bullish that during this period which should be a pullback is not a pullback," said Jay Hatfield, CEO at Infrastructure Capital Advisors in New York.
"There's just this market where it never goes down because one day we're buying tech, the other day we're buying everything else, but it never goes down, its really very bullish action in our opinion for this time of year."
Investors will get another round of inflation data in the form of the U.S. producer price index (PPI) on Thursday, along with data on consumer spending and the labor market, before next week's Fed policy meeting.
On Wall Street, the rise in yields weighed on tech stocks and pulled the Nasdaq lower. The Dow Jones Industrial Average rose 37.83 points, or 0.10%, to 39,043.32, the S&P 500 lost 9.96 points, or 0.19%, to 5,165.31 and the Nasdaq Composite lost 87.87 points, or 0.54%, to 16,177.77.
Yields continued their climb after the CPI data with the benchmark U.S. 10-year notes up 3.5 basis points (bps) to 4.19%, poised for a third straight session of advances, which would mark the longest run in just over a month.
The 2-year note yield, which typically moves in step with interest rate expectations, rose 2.9 bps to 4.6282% and was also on track for a third straight gain.
MSCI's gauge of stocks across the globe fell 0.39 points, or 0.05%, to 775.32, after climbing within 0.15% of an intraday record.
The STOXX 600 index closed up 0.16%, adding to its record level, aided by retail stocks, while Europe's broad FTSEurofirst 300 index rose 3.83 points, or 0.19%
The dollar index fell 0.12% to 102.80, with the euro up 0.21% at $1.0947 after the result of the long-awaited Operational Framework Review showed the European Central Bank wants to wean banks off free cash but will try to do so gently enough not to upset the financial system or lending.
Against the Japanese yen, the dollar strengthened 0.12% to 147.82, while sterling strengthened 0.06% to $1.28.
In cryptocurrencies, bitcoin gained 3.10% to $73,274.85 after climbing to its third straight record at $73,678.
U.S. crude settled up 2.78% at $79.72 a barrel and Brent settled at $84.03 per barrel, up 2.58% on the day, supported by a drop in U.S. crude inventories as well as a bigger-than-expected drop in U.S. gasoline stocks and potential supply disruptions after Ukrainian attacks on Russian refineries.