Updates to mid-afternoon
U.S. jobless claims subdued, home sales strong
Ukraine attack on Russian airfield boosts crude prices
European stocks soften as central banks flag concerns
PBOC, BoE and Riksbank hold rates, Switzerland cuts
By Stephen Culp
NEW YORK, March 20 (Reuters) - U.S. stocks turned lower and the dollar strengthened on Thursday as investors weighed solid data against notes of caution from world central bank leaders regarding mounting economic uncertainties stemming from U.S. President Donald Trump's erratic tariff policies.
Geopolitical tensions heated up with reports of huge blast triggered by a Ukrainian drone attack on a Russian airfield.
U.S. data showed jobless claims holding steady and an unexpected increase in existing home sales, which helped calm fears that the economy is softening, despite the U.S. Federal Reserve's lowered economic projections released on Wednesday.
Gold also eased and crude prices advanced as the afternoon progressed.
"It's a pretty odd day," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "There's a lot of noise out there. Sitting on your hands might be the best thing to do right now."
Straight on the heels of the Fed's decision to hold rates, the Bank of England (BoE) followed suit while also cautioning against assumptions it would cut rates in the near future as it grapples with economic uncertainties.
The Swiss National Bank cut its rate to near zero but flagged increasing worries over the global impact of Trump's trade policies, while Sweden's central bank predicted it would keep current rates in place in the near term and remain agile in its response to global economic developments.
"(Central banks are) probably right to feel cautious," Pavlik added. "The Trump team has instituted a playbook that no one can quite figure out yet and they're all playing defense."
Turkey's central bank, on the other hand, hiked its overnight lending rate to 46% on an interim basis after the lira plunged in the wake of the arrest of President Tayyip Erdogan's main political rival.
The Dow Jones Industrial Average .DJI fell 81.67 points, or 0.19%, to 41,882.96, the S&P 500 .SPX fell 27.86 points, or 0.49%, to 5,647.22 and the Nasdaq Composite .IXIC fell 123.95 points, or 0.70%, to 17,626.84.
European stocks closed lower after central banks across the continent flagged economic uncertainty amid a looming possibility of global trade war.
MSCI's gauge of stocks across the globe .MIWD00000PUS fell 3.47 points, or 0.40%, to 841.90.
The pan-European STOXX 600 .STOXX index fell 0.43%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 9.08 points, or 0.41%.
Emerging market stocks .MSCIEF fell 3.30 points, or 0.29%, to 1,140.01. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.16% lower at 592.98, while Japan's Nikkei .N225 fell 93.54 points, or 0.25%, to 37,751.88.
The greenback advanced after the Fed indicated it was in no rush to cut its key policy rate, while the pound remained soft in the wake of the BoE's decision to stand pat.
The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.47% to 103.87, with the euro EUR= down 0.51% at $1.0845.
Against the Japanese yen JPY=, the dollar strengthened 0.09% to 148.81.
In cryptocurrencies, bitcoin BTC= fell 1.58% to $84,027.59. Ethereum ETH= declined 3.12% to $1,971.42.
U.S. Treasury yields weakened after Fed Chair Jerome Powell indicated that the central bank is poised to act in the case of an economic slowdown.
The yield on benchmark U.S. 10-year notes US10YT=RR fell 2.1 basis points to 4.235%, from 4.256% late on Wednesday. The 30-year bond US30YT=RR yield fell 1.2 basis points to 4.5545% from 4.567% late on Wednesday.
The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2.2 basis points to 3.957%, from 3.979% late on Wednesday.
Oil prices rose after the United States imposed new Iran-related sanctions and as renewed tensions in the Middle East fueled supply concerns.
U.S. crude CLc1 rose 1.64% to settle at $68.26 per barrel, while Brent LCOc1 settled at $72.00 per barrel, up 1.72% on the day.
Gold prices paused after the safe-haven metal touched all-time highs earlier in the session.
Spot gold XAU= fell 0.16% to $3,042.38 an ounce. U.S. gold futures GCc1 rose 0.15% to $3,040.60 an ounce.
G10 rates date G10 rates on March 20, 2025 https://reut.rs/4ijKpHA
(Reporting by Stephen Culp; Additional reporting by Marc Jones in London; Editing by Joe Bavier, Kirsten Donovan)
((stephen.culp@thomsonreuters.com; 646-223-6076;))
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