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After overseas sell-off, Nasdaq closes lightly higher

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Investor bets decline for Fed rate cut next month

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US Treasury yields turn higher, dollar edges up

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UK markets whipped around by budget talk

By Sinéad Carew and Dhara Ranasinghe

NEW YORK/LONDON, Nov 14 (Reuters) -

MSCI's global equities gauge lost ground on Friday and Wall

Street had a muted end to the week while U.S. Treasury yields

climbed after hawkish Federal Reserve officials trounced on

hopes for a December interest rate cut.

After opening lower the S&P 500 recouped most of its

losses with some help from bargain hunters after blue-chip

bourses from Tokyo to Paris had closed sharply lower while fresh

concern about Britain's upcoming budget had added to pain in UK

markets.

Citing inflation worries and signs of relative stability in

the labor market after two U.S. rate cuts this year, a growing

number of Fed policymakers have signaled reticence on further

easing.

On Friday morning, Kansas City Federal Reserve President

Jeffrey Schmid pointed to concerns that "too hot" inflation goes

well beyond the narrow effects of tariffs alone, suggesting a

potential dissent in December if policymakers opted to cut

rates.

In the afternoon, Dallas Federal Reserve President Lorie

Logan signaled opposition to a December rate cut after she

already opposed the Fed's October cut on concerns inflation is

too high.

After 43 days without official data due to a record-long

U.S. government shutdown, traders reacted to the central

bankers' comments by pricing in a roughly 46% chance of a

quarter-point cut next month, down from 66.9% last week,

according to CME Group's FedWatch tool.

Still, the techology-focussed Nasdaq clawed its way back

from losses to close slightly higher as investors set aside some

of their jitters about high valuations in technology stocks.

"The rest of the world was weak because they were following

the lead of the U.S market on Thursday," said Andrew Slimmon,

senior portfolio manager at Morgan Stanley Investment Management

but he noted that Wall Street was supported by "a bid in stocks

that have led the decline in the last few days."

"People are conditioned to buy the dip. It has been a great

strategy. And you're at a time in the year when the winners keep

winning. That's why the stocks that are working today have been

the winners since the low in April," he said.

For example, AI chip leader Nvidia ( NVDA ) finished up 1.8%

while the smaller cap S&P 600 technology index shook

off earlier losses to close up 0.3%.

Likely adding to skittishness was the week ahead's

packed schedule, which includes

quarterly earnings from Nvidia ( NVDA )

and big retailers, which will shed light on the health of

the consumer and AI demand.

"There are so many cross currents out there in the

market that it can be hard to determine which way things are

headed Is the U.S. economy strong or weak? The answer is, both.

Is inflation heading higher or lower? Are valuations high or

low?" said Viktor Shvets, head of global desk strategy at

Macquarie Capital.

On Wall Street the Dow Jones Industrial

Average fell 309.74 points, or 0.65%, to 47,147.48, but

showed a 0.3% gain for the week. The S&P 500 fell 3.38

points, or 0.05%, to 6,734.11 for a 0.1% weekly gain and the

Nasdaq Composite rose 30.23 points, or 0.13%, to

22,900.59, leaving it with a roughly 0.5% loss for the week.

MSCI's gauge of stocks across the globe

was down 4.37 points, or 0.44%, to 995.79, which would leave it

with a roughly 0.4% gain for the week.

Earlier the pan-European STOXX 600 index and

Europe's broad FTSEurofirst 300 index had both closed

down about 1%.

Before Wall Street had opened, MSCI's broadest gauge of

Asian shares outside of Japan had closed down

1.5%.

U.S. Treasury yields turned higher after falling earlier in

the day. The yield on benchmark U.S. 10-year notes

rose 3.5 basis points to 4.146%, from 4.111% late on

Thursday. The 2-year note yield, which typically

moves in step with interest rate expectations for the Federal

Reserve, rose 1.9 basis points to 3.608%, from 3.589% late on

Thursday.

In currencies, the dollar gained on the euro and was roughly

flat against the yen as stocks recovered somewhat and traders

weighed the Fed's next moves.

The dollar index, which measures the greenback

against a basket of currencies including the yen and the euro,

rose 0.02% to 99.26, with the euro down 0.08% at $1.1622.

The Japanese yen strengthened 0.02% against the

greenback to 154.55 per dollar.

Sterling weakened 0.14% to $1.3171 after a report

said Finance Minister Rachel Reeves scrapped plans to raise

income tax rates in the upcoming budget, raising questions on

plans for balancing public finances.

In cryptocurrencies, bitcoin fell 3.93% to

$94,920.96. Ethereum declined 0.49% to $3,164.35.

Oil prices settled up more than $1 on supply fears after the

Black Sea port of Novorossiisk halted oil exports following a

Ukrainian drone attack on an oil depot in the major Russian

energy hub.

U.S. crude settled up 2.39%, or $1.40 at $60.09 a

barrel and Brent settled at $64.39 per barrel, up 2.19%

or $1.38 on the day.

Gold prices lost ground after the Fed officials' hawkish

remarks. Spot gold fell 2.12% to $4,082.76 an ounce. U.S.

gold futures fell 2.4% to $4,086.50 an ounce.