GLOBAL MARKETS-US stocks rally as earnings, rate cut hopes overshadow trade jitters; gold touches new high

US-China trade tensions simmering Fed Chair Powell leaves door open to further easing Dollar slips as traders focus on Fed cut bets, risk sentiment improves Gold crosses $4,200 for first time (Updates to US market open) By Stephen Culp NEW YORK, Oct 15 (Reuters) - Wall Street headed higher and gold resumed its ascent on Wednesday as earnings season hit its stride and dovish comments from U.S. Federal Reserve Chair Jerome Powell helped investors look past trade tensions between the United States and China. All three major U.S. stock indexes gained ground in a broad rally driven by rate cut hopes and solid corporate earnings results, while crude prices rebounded and gold hit new heights as Washington and Beijing ramped up the rhetoric in their ongoing tariff dispute. President Donald Trump said he was considering cutting some trade ties with Beijing in response to China not buying U.S. soybeans. This followed China’s ramped-up restrictions on crucial rare earth exports. U.S. Trade Representative Jamieson Greer described those restrictions as a complete repudiation of U.S.-Chinese trade agreements over the past six months, while Treasury Secretary Scott Bessent said he does not believe Beijing wants to be an “agent of chaos.” EARNINGS OVERSHADOW TRADE TENSIONS “The escalation of trade tensions with China don’t seem to be getting the market as worried as you might expect,” said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. “And in the meantime, so far, earnings are coming in OK with the financial companies reporting.” Upbeat third-quarter results from Morgan Stanley (MS.N) and Bank of America (BAC.N) lifted investor sentiment. Those sentiments got a boost from Powell’s commentary on Tuesday, which provided assurances that the U.S. economy is on firm footing, but warned that the labor market remained weak, seeming to affirm the market’s near certainty that the central bank will cut interest rates at the conclusion of its October meeting. Powell’s comments had “no surprises,” Martin said. “We’re still going to have some rate cuts. I don’t think (Powell’s remarks) were dovish or hawkish, but I think that by not being hawkish, they might be considered dovish.” The Dow Jones Industrial Average (.DJI) rose 287.60 points, or 0.62%, to 46,556.15, the S&P 500 (.SPX) gained 65.66 points, or 0.99%, to 6,709.97 and the Nasdaq Composite (.IXIC) rose 289.88 points, or 1.29%, to 22,811.34. European stocks rose as upbeat results from France’s LVMH (LVMH.PA) sparked a rally in luxury goods, soothing worries that slowing global economic growth and ongoing tariff wars are dampening corporate health. MSCI’s gauge of stocks across the globe (.MIWD00000PUS) rose 11.21 points, or 1.15%, to 989.53. The pan-European STOXX 600 (.STOXX) index rose 0.62%, while Europe’s broad FTSEurofirst 300 index (.FTEU3) added 14.36 points, or 0.64%. Emerging market stocks (.MSCIEF) rose 26.58 points, or 1.99%, to 1,365.56. MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) closed higher by 2.04%, to 708.93, while Japan’s Nikkei (.N225) rose 825.35 points, or 1.76%, to 47,672.67. The dollar slipped against its peers as Powell’s comments boosted rate cut bets and a stronger risk appetite robbed the greenback of some of its luster. The dollar index (=USD) , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.21% to 98.86, with the euro (EUR=) up 0.15% at $1.1622. Against the Japanese yen (JPY=) , the dollar weakened 0.32% to 151.32. U.S. Treasury yields softened as investors digested the latest development in the U.S.-China trade dispute. The yield on benchmark U.S. 10-year notes (US10YT=RR) fell 1.3 basis points to 4.009%, from 4.022% late on Tuesday. The 30-year bond (US30YT=RR) yield fell 2.6 basis points to 4.5977% from 4.624% late on Tuesday. The 2-year note (US2YT=RR) yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 0.6 basis points to 3.485%, from 3.479% late on Tuesday. Oil prices advanced as investors weighed the International Energy Agency’s projected 2025 supply surplus against the ongoing trade dispute between the world’s two largest economies. U.S. crude (CLc1) rose 0.26% to $58.84 a barrel and Brent (LCOc1) rose to $62.45 per barrel, up 0.1% on the day. Gold extended its record run, breached the $4,200 per oz level for the first time as the safe haven metal continued to benefit from geopolitical tensions. Spot gold (XAU=) rose 1.3% to $4,195.50 an ounce. U.S. gold futures (GCc1) rose 1.48% to $4,200.00 an ounce. World FX rates YTD here