Dollar rises after Fed chair says December rate cut not a given

The statement jolted US markets, lifting the dollar and pushing all three US equity briefly into the red.

The Nasdaq later recovered, finishing at a fourth straight record behind another gain by artificial intelligence giant Nvidia, which became the first company to reach a $5 trillion market value.

The Dow finished modestly lower while the S&P 500 ended flat.

Oxford Economics characterized Powell as "hawkish," predicting that the central bank would "move to the sidelines" and not cut again until March. 

Powell also indicated in his press conference that the dearth of economic data due to the US government shutdown could also prompt more cautious policy making.

The Dow had earlier topped 48,000 points following fresh peaks set in London and some Asian markets as US President Donald Trump voiced optimism on the eve of crunch trade talks with China's President Xi Jinping.

Trump predicted a "great meeting," while China's foreign ministry was more cautious, saying that Xi and Trump would have "in-depth" talks on "major issues."

Key matters concern thorny trade matters such as Chinese exports of rare earths and US efforts to bolster US exports of American soybeans to China.

Analysts have also seen Nvidia's latest surge as partly based on hopes Trump may negotiate a resumption of the company's exports to China.

The two leaders are set to meet Thursday in Busan, a southern port city not far from the APEC summit attended by Trump.

The European Central Bank and the Bank of Japan are expected to hold interest rates steady this week. 

Benchmark stocks indices in Tokyo and Seoul each reached record highs Wednesday, while European markets were mixed.

After Seoul closed, the United States and South Korea reached an agreement to maintain reciprocal tariffs at 15 percent and to reduce levies on automobiles and auto parts.

In company news, shares in UK drugmaker GSK rose more than two percent in London after it raised its full-year guidance on strong sales growth. 

Shares in Mercedes-Benz rose more than four percent after the company reassured investors it faced no immediate production shutdowns due to microchip shortages, even though third-quarter net profits plunged more than 30 percent due to Trump's tariff blitz as well as slumping sales in China.

US industrial giant Caterpillar surged 11.6 percent after reporting better than expected profits, partly due to strong demand in its energy & transportation business partly related to heavy AI infrastructure investment.

- Key figures at around 2020 GMT -

New York - Dow: DOWN 0.2 percent at 47,632.00 (close)

New York - S&P 500: FLAT at 6,890.59 (close)

New York - Nasdaq Composite: UP 0.6 percent at 23,958.47 (close)

London - FTSE 100: UP 0.6 percent at 9,756.14 (close)

Paris - CAC 40: DOWN 0.2 percent at 8,200.88 (close)

Frankfurt - DAX: DOWN 0.6 at 24,124.21 (close)

Tokyo - Nikkei 225: UP 2.2 percent at 51,307.65 (close)

Hong Kong - Hang Seng Index: Closed for a holiday

Shanghai - Composite: UP 0.7 percent at 4,016.33 (close)

Euro/dollar: DOWN at $1.1595 from $1.1656 on Tuesday

Pound/dollar: DOWN at $1.3187 from $1.3276

Dollar/yen: UP at 152.82 yen from 152.06 yen

Euro/pound: UP at 87.94 from 87.80 pence

Brent North Sea Crude: UP 0.8 percent at $64.92 per barrel

West Texas Intermediate: UP 0.6 percent at $60.48 per barrel

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