Stocks closed modestly lower in a volatile session as market participants weighed better U.S. economic data against the fears the Fed may soon start to curtail its bond buying.
U.S. Treasury debt prices rose after the Treasury saw solid demand for new inflation-linked bonds, though benchmark yields held above 2 percent as traders worried about how high yields might rise whenever the U.S. Federal Reserve decides to taper its bond purchases.
Gold settled higher as the dollar remained under pressure and as a senior Federal Reserve official said the central bank is in no hurry to start winding down its economic stimulus.
Oil prices pared losses after falling to a three-week low on Thursday in a broader commodities sell-off, supported as selling in U.S. equities tapered off.
Japan's stock market finished Thursday's session 7 percent lower, in a hugely volatile session which saw the Nikkei gain 2 percent in early trade only to dive to a one-week low late in the session.
Stocks closed down 1 percent after the minutes from the last Fed policy setting meeting suggested the central bank could begin tapering bond purchases sooner than the market expects.
U.S. Treasury yields on the benchmark 10-year note rose above the key two percent level on Wednesday, the highest level in two months.
Crude dropped on Wednesday, after data showing a surprise jump in U.S. gasoline stockpiles sparked worries that summer demand could be weaker than expected.
Gold settled lower on Wednesday, giving up earlier gains after U.S. Federal Reserve Chairman Ben Bernanke warned of the risks of holding interest rates too low for too long, which boosted the dollar.
The dollar rallied to trade at a fresh 4 1/2-year high against the yen after Fed Chairman Ben Bernanke warned that holding interest rates too low for too long has its risks.
European shares closed higher on Wednesday, mirroring gains in the U.S. after Federal Reserve Chairman Ben Bernanke reiterated his commitment to maintaining loose monetary policy. However, both European and U.S. shares pared some gains after Bernanke's more hawkish comments in the Q&A session.
The Bank of Japan ended a two-day meeting on Wednesday with a decision to leave monetary policy unchanged and a promise to monitor volatile bond markets.
Confidence returned to most Asian stock markets on Wednesday after investors were reassured that global central banks would not pare down their economic stimulus programs.
The Fed Chairman could give the dollar bulls reason to pause, ending its rally on rumors of the central bank unwinding its aggressive monetary stimulus program.
The U.S. dollar fell against the euro on Tuesday after St. Louis Federal Reserve President James Bullard dented expectations the U.S. central bank may taper its bond purchases.
Stocks closed higher but off their best levels after two Fed officials dampened speculation the central bank was ready to consider "tapering" its bond-buying.
Gold, down in seven of its last eight sessions extended earlier losses on Tuesday on a firm dollar, weak technical signals and speculation that the U.S. Federal Reserve might rein in its stimulus program.
Oil fell on Tuesday, on concerns that the U.S. Federal Reserve might scale back its quantitative easing program, which could damage fragile demand.
U.S. Treasurys prices were little changed on Tuesday as most investors moved to the sidelines.
Caution prevailed in Asian trade on Tuesday as investors grow concerned about the duration of global monetary stimulus ahead of Federal Reserve chief Ben Bernanke's testimony to the U.S Senate.