ORLANDO, Florida, March 17 (Reuters) - Stocks rose, and

bond yields and the dollar slipped on Tuesday, as investors

shrugged off a rebound in oil prices that lifted Brent crude

back above $100 a barrel, and turned their attention to the

Federal Reserve's interest rate decision on Wednesday.

In my column today I look at why Chinese President Xi

Jinping goes into his summit with U.S. President Donald Trump

with a stronger hand than he would have thought possible a few

months ago. With Trump's foreign policy agenda hogging the

spotlight, China's economic recovery has gone under the radar.

If you have more time to read, here are a few articles I

recommend to help you make sense of what happened in markets

today.

1. U.S. 'transitory' inflation turns five and is still a

big brat

2. How the Fed and other central banks can bark without

biting: Mike Dolan

3. Iran's $200 oil threat isn't that far-fetched: Bousso

4. Trump's summit delay casts pall over U.S.-China trade

truce

5. Debt investors offloading exposure to software

companies is latest sign of pain

Today's Key Market Moves

* STOCKS: S&P 500 +0.25%, Nasdaq +0.5%. Europe +0.6%, UK

+0.8%, Asia mixed.

* SECTORS/SHARES: Eight S&P 500 sectors rise, consumer

discretionary and energy +1%. Healthcare is biggest decliner,

-1%. Airline stocks rise, Delta +6%; private credit rebounds,

Apollo and Blackstone +5%. Eli Lilly -6%.

* FX: Dollar drifts lower. Nokkie best G10 performer

+0.9%, Aussie +0.5% after RBA hike.

* BONDS: U.S. yields down 2 bps at long end, 2s/10s

curve down to 52 bps, near flattest levels of the year. 20-year

auction draws solid demand.

* COMMODITIES/METALS: Oil +3%, Brent back above

$100/bbl. Crude now up ~40% y/y. Gold steady around $5,000/oz.

Today's Talking Points

* Wall Street's "exceptionalism"?

U.S. stocks' outperformance since war in the Middle East

broke out has been impressive. Compare and contrast: euro zone

stocks are down 3%, UK stocks are down 4%, the Nikkei and Asia

ex-Japan are down around 7%; the S&P 500 has lost less than 2%

and the Nasdaq is almost flat.

Yet zoom out to January 1, and the picture flips on its

head. So far this year: euro zone stocks are up 1%, UK stocks

and the Nikkei are up 4%, and Asia ex-Japan is up around 7%; the

S&P 500 has lost 2.5% and the Nasdaq is down 4.5%.

* U.S. fuel shock

Average U.S. gas prices at the pump are up 25% to just under

or just over $4/gallon, depending on the survey, and diesel is

now over $5/gallon. Jet fuel has jumped more than 50%, a rise

that is sure to push the cost of air travel quite substantially.

So far, U.S. consumers have remained extremely resilient to

the war-driven surge in fuel costs. But assuming they stay

elevated for a while yet, they will bite. Perhaps this helps

explain why the bond yield curve is flattening - once the

initial inflation shock has passed, growth could slow sharply.

* Curves flatten everywhere

It's not just the U.S. yield curve flattening. If you

believe what yield curves signal about the future growth

outlook, bond markets are warning that a slowdown is coming in

many industrialized economies.

The German 2s/10s yield curve has been flattening since

early February when it was around 80 bps. It recently compressed

to 45 bps, the flattest in a year. Similarly, the UK yield curve

was above 90 bps, the steepest since 2018, but is flattening

now. And the Aussie curve, facing rising policy rates, is the

flattest since December 2024.

What could move markets tomorrow?

* Developments in the Middle East

* Energy market moves

* New Zealand current account (Q4)

* Japan tankan survey (March)

* Japan trade (February)

* European Central Bank begins two-day policy meeting

* Brazil interest rate decision

* Canada interest rate decision

* U.S. durable goods, factory orders (January)

* U.S. producer price inflation (February)

* U.S. Federal Reserve interest rate decision, revised

economic projections and "dot plot", Chair Jerome Powell press

conference

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