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US stocks rise, dollar weakens as central banks react to Fed rate cut

Global stocks largely gain, as Middle Eastern, Asian central banks cut rates.

Norway hikes rates; Switzerland, Japan, England on hold.

➤ US-China trade negotiators to meet in Washington.

➤ Brent crude oil jumps.

Wall Street posted gains Sept. 19, while the dollar weakened, after the U.S. Federal Reserve cut rates and a number of Middle Eastern and Asian central banks followed suit.

The Fed lowered its benchmark interest rate by 25 basis points on Sept. 18, easing policy for the second time this year to stave off worries about a potential slowdown. Three officials dissented on the decision, with one favoring a more aggressive cut and two preferring to keep rates unchanged.

Fed Chairman Jerome Powell avoided offering specific guidance during his post-meeting news conference, saying Fed policy is "not on a preset course" and that officials will monitor incoming data to gauge future changes to their benchmark rate.

The S&P 500 rose 0.3% and the Nasdaq 100 gained 0.4% around 9:35 a.m. ET. European stocks also traded higher, with the FTSE 100 gaining 0.6%, Germany's DAX index up 0.4% and France's CAC 40 rising 0.6%.

The Shanghai SE Composite advanced 0.5% as face-to-face trade talks between the U.S. and China were reportedly scheduled for Sept. 19 and 20 in Washington, ahead of higher-level trade talks in October.

The outcome of the negotiations in October will be key for the Fed's next move, according to Danske Bank.

Hong Kong's Hang Seng index dropped 1% as the Hong Kong Monetary Authority lowering policy rates after the Fed's move.

Japan's Nikkei 225 index added 0.4% as the Bank of Japan kept its monetary policy unchanged and said it will review economic and price developments at its next meeting as it warned that momentum toward achieving its inflation target could be lost. The Japanese yen appreciated 0.4% against the dollar.

The dollar spot index, which measures the currency against a basket of peers, lost 0.3%. A trade deal in October could reverse yuan weakness, Citi analysts wrote.

The Norwegian kronor, which appreciated 0.5% after Norges Bank further tightened its monetary policy, was little changed around 6:40 a.m. ET. Analysts have penciled in another rate hike in 2020.

The Swiss franc gained 0.5% against the dollar as its central bank maintained key rates but lowered its GDP growth and inflation forecast for 2019.

The Australian dollar depreciated 0.4% against the U.S. dollar as unemployment rose in Australia, boosting expectations of another rate cut.

Sterling was up 0.2% versus the dollar, as the Bank of England maintained its base rate. The U.K. Supreme Court convened for the final day to hear appeals regarding Prime Minister Boris Johnson's decision to prorogue Parliament.

The euro added 0.3% versus the dollar around 6:30 a.m. ET.

In the debt market, Treasurys rose as 10-year yields fell 3 basis points to 1.766% around 9:40 a.m. ET. German Bunds with the same maturity were little changed.

Among commodities, Brent crude oil jumped 1.6% to $64.63 per barrel on the ICE Futures Exchange. Gold lost 0.4%.

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The day ahead:

10 a.m. ET — U.S. existing home sales (Econoday consensus: 5.380 million)

10 a.m. ET — U.S. leading indicators (Econoday consensus: 0% monthly)

10:30 a.m. ET — U.S. EIA natural gas report

4:30 p.m. ET — U.S. Fed balance sheet and money supply