Markets give up gains but US dollar rally may be ending

US stocks fell on Thursday. The S&P 500 declined 0.5 percent, giving up part of the 1.2 percent gain on Wednesday.

Stocks had jumped on Wednesday after the Federal Reserve indicated that day after its monetary policy meeting that it remained in no hurry to raise interest rates.

Treasuries also gave up some of their previous days' gains. Two-year yields rose six basis points to 0.61 percent on Thursday after falling 12 basis points on Wednesday, the biggest decline since March 2009.

The US dollar also made a turnaround on Thursday, recovering almost all its loss on Wednesday against the euro.

Still, in the longer term, the US dollar's rally may be about to end. From Bloomberg:

“The dollar rally is nearing its end,” David Bloom, HSBC’s global head of currency strategy, wrote in a report Thursday. “The dollar bull needs feeding and new factors challenge the consensus view that the dollar can extend in a sustained way.”

HSBC joined JPMorgan Chase & Co. in shifting away from previously bullish views on the dollar by casting doubt on whether its rally can continue. JPMorgan said the dollar may be in the early stages of a bubble in a March 14 report, questioning the U.S. economy’s ability to withstand headwinds and lower inflation brought by the currency’s appreciation.