(Bloomberg) — A semblance of calm returned to markets on Wednesday as the focus turned to corporate earnings after hawkish comments from Federal Reserve Chair Jerome Powell drove the dollar and Treasury yields to five-month highs.

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The Stoxx Europe 600 index swung between small gains and losses amid mixed reports from some of the region’s biggest companies. London’s benchmark underperformed, the pound gained and gilts fell after UK inflation slowed less than estimates. US equity futures edged lower after the S&P 500 clocked a third day of losses on Monday. The MSCI Asia Pacific Index came close to erasing its gains for the year.

Technology stocks led declines in Europe, with ASML Holding NV plunging more than 6% after missing estimates for first-quarter orders. Adidas AG climbed more than 4% after raising its revenue and profit outlook, while LVMH led the luxury sector higher onthe back of reassuring results. Volvo AB gained after reporting robust earnings.

Treasury yields traded in a narrow range near 2024 highs, and a gauge of the dollar was steady after five days of gains. Powell said Tuesday it would likely take longer to have confidence that inflation is headed toward the central bank’s target. The remarks represented a shift in his message after a key measure of inflation exceeded forecasts for a third month.

Meanwhile, tensions in the Middle East continue to simmer. Israel is weighing a response to what was the first attack on the Jewish state from Iranian soil. Saudi Arabia and the United Arab Emirates called for maximum “self-restraint” to spare the region “from the dangers of war and its dire consequences,” in an unusually frank joint statement Wednesday.

“Appetite for risky assets continues to fall as tensions remain in the Middle East and the prospects of a rate cut in the US are decreasing on an almost daily basis,” said Matete Thulare, head of foreign-exchange execution at Rand Merchant Bank in Johannesburg.

After starting the year by pricing in as many as six rate cuts in 2024, or 1.5 percentage points of easing, traders are now doubtful there will even be a half point of reductions. Market-implied expectations for Fed rate cuts — which have collapsed in the past two weeks — declined further after Powell’s comment on inflation.

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On Tuesday, Fed Vice Chair Philip Jefferson said he expects inflation will continue to moderate with interest rates at their current level but persistent price pressures would warrant holding borrowing costs high for longer. Richmond Fed President Thomas Barkin said some recent data, including the consumer price index, has not “been supportive” of a soft landing.

Elsewhere, Asian liquefied natural gas prices jumped to the highest level since early January while oil edged lower, as traders wait to see how Israel would respond to Iran’s weekend attack. Gold held near a record high.

Key events this week:

• Eurozone CPI, Wednesday

• Fed issues its Beige Book, Wednesday

• Cleveland Fed President Loretta Mester speaks, Wednesday

• Fed Governor Michelle Bowman speaks, Wednesday

• BOE Governor Andrew Bailey speaks, Wednesday

• Taiwan Semiconductor earnings, Thursday

• US Conf. Board leading index, existing home sales, initial jobless claims, Thursday

• Fed Governor Michelle Bowman speaks, Thursday

• New York Fed President John Williams speaks, Thursday

• Atlanta Fed President Raphael Bostic speaks, Thursday

• BOE Deputy Governor Dave Ramsden and ECB Governing Council member Joachim Nagel speak, Friday

• Chicago Fed President Austan Goolsbee speaks, Friday

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.1% as of 8:18 a.m. London time

• S&P 500 futures were little changed

• Nasdaq 100 futures fell 0.1%

• Futures on the Dow Jones Industrial Average were little changed

• The MSCI Asia Pacific Index fell 0.3%

• The MSCI Emerging Markets Index rose 0.2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.1%

• The euro was little changed at $1.0625

• The Japanese yen rose 0.1% to 154.55 per dollar

• The offshore yuan rose 0.2% to 7.2515 per dollar

• The British pound rose 0.3% to $1.2460

Cryptocurrencies

• Bitcoin rose 0.6% to $63,446.13

• Ether rose 0.3% to $3,079.49

Bonds

• The yield on 10-year Treasuries was little changed at 4.66%

• Germany’s 10-year yield was little changed at 2.49%

• Britain’s 10-year yield advanced three basis points to 4.33%

Commodities

• Brent crude fell 0.2% to $89.82 a barrel

• Spot gold fell 0.1% to $2,379.87 an ounce

This story was produced with the assistance of Bloomberg Automation.

–With assistance from Abhishek Vishnoi and Michael Msika.

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