* 10-yr U.S. yield tops 1.75% as investors digest Fed
* S&P 500 drops, tech-heavy Nasdaq slumps
* MSCI global index little changed as Europe's STOXX gains
* Dollar recovers from post-Fed drop, pressuring oil (Updates with U.S. trading, adds dateline)
By Lewis Krauskopf and Marc Jones
NEW YORK/LONDON, March 18 (Reuters) - Benchmark U.S. Treasury yields hit 14-month peaks on Thursday, putting fresh pressure on technology stocks, as markets reversed some moves from their initial reactions to the Federal Reserve's policy statement a day earlier.
The tech-heavy Nasdaq fell over 1% in morning trading, while MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.01%, supported by European shares as the pan-European STOXX 600 index .STOXX rose 0.45%.
The dollar rallied, pressuring oil prices and reversing an initial fall following the U.S. central bank's meeting on Wednesday, when the Fed said the U.S. economy is heading for its strongest growth in nearly 40 years as it recovers from the COVID-19 crisis.
Investors said markets were continuing to react to the Fed's meeting and Chairman Jerome Powell's press conference, as the central bank pledged to keep its foot on the gas despite an expected surge of inflation. all about the Federal Reserve meeting driving the markets today,” said Brad Peterson, regional portfolio adviser at Northern Trust (NASDAQ:NTRS) Wealth Management.
“While they reassured people that they aren't going to be in any hurry to raise short rates, their comfort with the back-up in rates at the long end of the curve is a bit surprising to people.”
On Wall Street, the Dow Jones Industrial Average .DJI rose 171.76 points, or 0.52%, to 33,187.13, the S&P 500 .SPX lost 13.8 points, or 0.35%, to 3,960.32 and the Nasdaq Composite .IXIC dropped 181.76 points, or 1.34%, to 13,343.44.
The S&P 500 tech sector .SPLRCT slumped more than 1% while financials .SPSY , which are sensitive to bond yields, were the best-performing group.
The yield on the 10-year U.S. Treasury note US10YT=RR rose as high as 1.754%, its highest level since January 2020, leading a worldwide move higher in bond yields.
Benchmark 10-year notes US10YT=RR last fell 25/32 in price to yield 1.7277%, from 1.641% late on Wednesday.
"I don't know what the Fed can do to stop a rise in yields that is based on stronger fundamentals," said BCA chief global fixed income strategist Rob Robis, pointing to the $1.9 trillion U.S. coronavirus relief package that will drive growth.
"The path of least resistance is still toward higher yields," he said. "The U.S. Treasury market leads the world and every bond market responds."
Data showed the number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the labor market is regaining its footing as an acceleration in the pace of vaccinations leads to more businesses reopening. U.S. dollar rallied across the board, as higher Treasury yields helped it recoup losses from the previous session. dollar index =USD rose 0.474%, with the euro EUR= down 0.53% to $1.1914.
Oil prices fell for a fifth day on a stronger dollar, a further increase in U.S. crude and fuel inventories and the weight of the ever-present COVID-19 pandemic. crude CLc1 recently fell 4.02% to $62.00 per barrel and Brent LCOc1 was at $65.44, down 3.76% on the day.
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http://tmsnrt.rs/2jvdmXl Global currencies vs. dollar
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http://tmsnrt.rs/2ihRugV MSCI All Country World Index Market Cap
http://tmsnrt.rs/2EmTD6j Rising U.S. Treasury yields
https://tmsnrt.rs/3cNEpX5
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