After a brief pause on Thursday, global markets resumed the bullish tone that started after the Fed's dovish statement on Wednesday. With the Fed scaling back on its plans to hike short-term rates later this year, markets acted accordingly. Treasury yields plunged to the lowest level in more than a month (see Chart 1). That pushed the dollar lower and contributed to a bounce in commodity markets. The drop in yields also gave a big boost to dividend paying stocks like utilities and REITs which had a very strong week (Chart 2). Homebuilders were also strong on the prospect for lower mortgage rates (Chart 3). Small and midcap stock indexes in the U.S. hit new highs, while the large cap Dow Industrials and S&P 500 neared their old highs. Even stronger gains were seen overseas.
