European stocks and U.S. futures fell after Powell said the Fed was in no rush to cut rates. The Stoxx 600 fell 0.7%, on track for a fourth straight week of losses; S&P 500 futures fell for a second straight day. Two-year Treasury yields stabilized after rising in the previous session as traders lowered expectations for a December rate cut by the Federal Reserve.
The dollar index is expected to rise about 1.4% this week, hitting a two-year high on Thursday. The dollar rose after Trump won the election, and the latest impetus came from comments by Federal Reserve Chairman Jerome Powell, who said the Fed may slowly ease policy. The Fed's path may become clearer later on Friday when the U.S. releases retail sales data and multiple Fed officials are scheduled to speak. Powell said the Fed is in no hurry to cut interest rates given the strength of the economy, prompting traders to lower their expectations for a December rate cut, reducing the probability of a rate cut to less than 60% from about 80% the day before.
In Asia, the MSCI regional index rose for the first time this week, while China's CSI 300 index fell despite signs of economic recovery. The yen reversed losses after Japanese Finance Minister Katsunobu Kato said authorities were monitoring foreign exchange markets.
In commodities, oil prices fell this week on a stronger dollar and concerns that global markets will shift to oversupply next year, while gold prices remained near a two-month low.
