U.S. stocks fell, while Treasuries rose after the Federal Reserve maintained its support for the economy.

Policy makers strengthened their view of the economy and said that recent increases in inflation looked “transitory,” reassuring investors that the central bank is in no hurry to tap the brakes on growth. The dollar was lower, the 10-year Treasury rate was at 1.61 per cent and gold was little changed.

“No news is good news as far as the market is concerned because it means the Fed will remain accomodative for the near future,” said Ellen Hazen, portfolio manager and principal at F.L.Putnam Wealth Management. “This is a Goldilocks Fed. It is exactly what the equity markets are looking for.”

The Fed decision came as investors parsed the latest batch of corporate earnings reports. Alphabet Inc. rose to a record after its results showed a surge in ad sales. Microsoft Corp. was among the biggest drags, dropping to a three-week low after the software maker failed to deliver the blockbuster results some analysts were looking for. All of the main U.S. equity gauges closed lower.

Among other earnings-related news:

• Boeing Co. dropped after it burned through more cash than expected in the first quarter.
• Texas Instruments Inc. fell the most in two months after it gave a sales forecast that some analysts saw as weak.

With stock valuations about 25 per cent above their five-year average, investors have been searching for new catalysts to sustain the bull market momentum.

A string of encouraging data and rapid vaccination progress have boosted optimism about growth prospects in the developed world, reviving the so-called reflation trade in recent days. A release Thursday may show the U.S. gross domestic product increased an annualized 6.8 per cent in the first quarter.

Crude-oil futures rose after OPEC+ expressed confidence in the demand outlook with plans to boost supply, even India’s raging COVID-19 crisis is causing near-term pressure.

Here are some key events to watch this week:

• President Joe Biden makes his first address as president to a joint session of Congress Wednesday
• U.S. GDP Thursday is forecast to show growth strengthened in the first quarter

These are some of the main moves in markets:

Stocks

• The S&P 500 fell 0.1 per cent as of 4:01 p.m. New York time
• The Nasdaq 100 fell 0.4 per cent
• The Dow Jones Industrial Average fell 0.5 per cent
• The MSCI Emerging Markets Index rose 0.4 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.4 per cent
• The euro rose 0.2 per cent to US$1.2129
• The British pound rose 0.2 per cent to US$1.3947
• The Japanese yen rose 0.1 per cent to 108.59 per dollar

Bonds

• The yield on 10-year Treasuries declined one basis point to 1.61 per cent
• Germany’s 10-year yield advanced two basis points to -0.23 per cent
• Britain’s 10-year yield advanced two basis points to 0.80 per cent

Commodities

• West Texas Intermediate crude rose 1.2 per cent to US$64 a barrel
• Gold futures were little changed

--With assistance from Andreea Papuc, Emily Barrett, Srinivasan Sivabalan and Claire Ballentine.