GLOBAL MARKETS-Stocks rally on U.S. rate-cut hopes, bond yields rise

* U.S. stocks finish more than 2% higher on the day
* U.S. 10-yr bond yields climb back from lowest since Sept
2017

(Updates with closing U.S. market levels)
By Caroline Valetkevitch
NEW YORK, June 4 (Reuters) - Global stock indexes rallied on
Tuesday and U.S. stocks registered their biggest one-day gains
in five months as Federal Reserve Chairman Jerome Powell seemed
to open the door to the possibility of a rate cut, while yields
on U.S. Treasuries rose.
Powell said the U.S. central bank will respond "as
appropriate" to the risks posed by a global trade war and other
recent developments. His remarks followed St. Louis Fed President James Bullard's
comments late on Monday that a rate cut "may be warranted soon."
"Investors are taking comfort in what appears to be a Fed
that is contemplating cutting rates if the economy materially
slows down," said Michael Geraghty, equity strategist at
Cornerstone Capital Group in New York.
In a brief statement included as part of a speech on broader
monetary policy issues, Powell said the Fed was "closely
monitoring the implications" of ongoing trade disputes.
The United States' trade dispute with China and other
countries has been escalating in recent weeks, increasing market
uncertainty and driving down stocks in May.
A bounceback in U.S. internet-related stocks helped the
equity rally following a sell-off in those names Monday that was
tied to worries about a clampdown on the world's internet and
social media giants.
The Dow Jones Industrial Average .DJI rose 512.4 points,
or 2.06%, to 25,332.18, the S&P 500 .SPX gained 58.82 points,
or 2.14%, to 2,803.27 and the Nasdaq Composite .IXIC added
194.10 points, or 2.65%, to 7,527.12.
The last time the benchmark S&P index showed a bigger daily
percentage gain was on Jan. 4, when Powell turned more dovish
after a late 2018 sell-off, with a promise that the Fed would be
patient and flexible in its interest rate path.
The pan-European STOXX 600 index .STOXX rose 0.59% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
1.37%.
In U.S. Treasuries, yields rose, with longer-dated yields
climbing from their lowest since September 2017.
"The bond market had had a pretty impressive run over the
past two weeks, and as bonds started going lower, you started to
see more money flowing into stocks," said Michael James,
managing director of equity trading at Wedbush Securities in Los
Angeles.
Market uncertainty had pushed investors into top-rated
government bonds and other safety plays in recent weeks.
In late U.S. trading, benchmark 10-year Treasury yields
US10YT=RR rose 4.50 basis points to 2.126% after hitting
2.061% Monday. Powell's comments helped to push the U.S. dollar modestly
lower. The dollar index .DXY fell 0.03%. The Japanese yen JPY=
weakened 0.06% versus the greenback at 108.15 per dollar.
The global stock market rally boosted oil prices, while gold
prices eased off of a three-month peak.
Brent futures LCOc1 gained 69 cents, or 1.1%, to settle at
$61.97 a barrel. The global benchmark fell as low as $60.21
earlier in the session, its lowest since Jan. 29. U.S. crude
CLc1 rose 23 cents, or 0.4%, to $53.48.
Spot gold XAU= eased 0.1% to $1,324.01 per ounce, after
touching its highest since Feb. 27 at $1,328.98 earlier in the
session.

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Record low RBA cash rate https://tmsnrt.rs/2QFJt4n
Yields, oil and stocks all locked in slide https://tmsnrt.rs/2QJ5GOZ
Asian stock markets https://tmsnrt.rs/2zpUAr4
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