GLOBAL MARKETS-Stocks gain, dollar weakens after Fed signals possible rate cuts

* MSCI global stocks index hits six-week high, Wall Street
rises
* Fed decision comes after ECB's Draghi hints at stimulus
* Dollar index weakens; 10-year U.S. yields fall

(Updates with close of U.S. markets)
By Lewis Krauskopf
NEW YORK, June 19 (Reuters) - A gauge of global stock
markets strengthened on Wednesday, bolstered by gains on Wall
Street, and benchmark U.S. Treasury yields and the dollar
dropped after the Federal Reserve signaled possible interest
rate cuts over the rest of this year.
The U.S. central bank held interest rates steady, as
expected, but said it "will act as appropriate to sustain" the
country's economic expansion as it approaches the 10-year mark
and dropped a promise to be "patient" in adjusting rates.
The market expects the Fed could cut rates as soon as its
next meeting, in July.
"I think it's right in line with market expectations, puts a
July cut in play,” said Brett Ewing, chief market strategist at
First Franklin Financial Services in Tallahassee, Florida.
Nearly half of the Fed's policymakers now show a willingness
to lower borrowing costs over the next six months.
Even policymakers who did not write down a forecast for a
rate cut this year believe "that the case for somewhat more
accommodative policy has strengthened," Fed Chairman Jerome
Powell said in a news conference following the meeting.
Investors' hopes that the Fed would soon cut interest rates
were fueled on Tuesday when European Central Bank President
Mario Draghi hinted at economic stimulus, comments that drove up
stocks and weakened yields. "You have global central banks in a nearly orchestrated
positioning, prepared to act if respective economies falter,"
said Quincy Krosby, chief market strategist at Prudential
Financial in Newark, New Jersey. "Clearly the market is
embracing it."
MSCI's gauge of stocks across the globe .MIWD00000PUS
gained 0.70%. The index rose to its highest point in six weeks.
On Wall Street, the Dow Jones Industrial Average .DJI rose
38.46 points, or 0.15%, to 26,504, the S&P 500 .SPX gained
8.71 points, or 0.30%, to 2,926.46 and the Nasdaq Composite
.IXIC added 33.44 points, or 0.42%, to 7,987.32.
The pan-European STOXX 600 index .STOXX ended little
changed ahead of the Fed decision.
Investors will now turn attention to U.S.-China trade
relations, with a meeting between U.S. President Donald Trump
and his Chinese counterpart Xi Jinping set for next week's G20
meeting in Japan.
“You have the G20 summit coming up in a week and a half,
said Eric Donovan, managing director, OTC FX-interest rates at
INTL FCStone in New York. "It's kind of ridiculous to think that
the Fed was going to cut today."
Benchmark 10-year U.S. notes US10YT=RR last rose 8/32 in
price to yield 2.0302%, from 2.058% late on Tuesday.
The dollar index .DXY , which measures the greenback
against a basket of currencies, fell 0.41%, with the euro EUR=
up 0.31% to $1.1226. U.S. crude CLcv1 settled down 0.3% at $53.76 a barrel, and
Brent LCOcv1 settled at $61.82 a barrel, down 0.5%.
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GRAPHIC-S&P500 approaches record high https://tmsnrt.rs/2Y7dDQE
GRAPHIC-Multiverse bond index https://tmsnrt.rs/2Y0uHbg
GRAPHIC-German, U.S. bond yields in sharp falls this year https://tmsnrt.rs/2Y7buo4
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