GLOBAL MARKETS-Bull run in stocks continues with US dollar rising after Fed rate cut

By Chibuike Oguh

NEW YORK, Sept 18 (Reuters) - World equity markets reached a new peak on Thursday, powered by a continuing bull run on Wall Street, while the U.S. dollar gained against major peers, underpinned by the Federal Reserve's interest rate cut, while the pound dipped slightly after the Bank of England kept rates unchanged.

Benchmark S&P 500, the Dow and the Nasdaq all finished at record highs. Intel INTC.O jumped more than 22% after Nvidia NVDA.O said it would invest $5 billion in the struggling U.S. chipmaker. Nvidia's shares closed up 3.5% on the day.

The Dow Jones Industrial Average .DJI rose 0.27% to 46,142.42, the S&P 500 .SPX climbed 0.48% to 6,631.96 and the Nasdaq Composite .IXIC advanced 0.94% to 22,470.73.

The small-cap Russell 2000 index .RUT rose and touched an intraday record high for the first time since November.

The pan-European STOXX 600 .STOXX index gained 0.8%. MSCI's gauge of stocks across the globe .MIWD00000PUS rose as high as 981.65, topping the previous session's record. It was last up 0.29% at 979.18.

The Fed cut rates by 25 basis points on Wednesday and its closely watched "dot plot" had pointed to two more rate cuts over its remaining two meetings this year, but only one additional reduction in 2026.

"The market is getting a little priced for perfection, and some of the job erosion is a little unsettling, which is what I think probably led (Fed Chair) Jerome Powell to make his cut yesterday and sort of say he's going to continue to be data dependent," Sandy Villere, portfolio manager at Villere & Co in New Orleans.

"The economy in general, between the eroding job numbers and inflation, has kind of stabilized - although you can never fight the Fed and falling rates, which is what I think got the market popping today with a little follow-through," Villere said.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 3.2 basis points to 4.108%.

The Bank of England voted 7-2 to keep rates unchanged at 4% while slowing the annual pace at which the central bank sells gilts it purchased between 2009 and 2011 to 70 billion pounds from the current 100 billion pounds, in line with economists' forecasts.

The dollar strengthened 0.52% to 0.793 against the Swiss franc CHF=EBS and was up 0.67% at 147.95 against the Japanese yen JPY=EBS.

The euro EUR= fell 0.23% to $1.1785 while the sterling GBP= weakened 0.56% to $1.355. The dollar index =USD rose 0.43% to 97.37.

Norway's central bank cut its policy interest rate by 25 basis points to 4.0%, as widely expected, and said it aims to cut again in the next 12 months but not as much as previously planned. The Norwegian krone NOK remained near a three-year high.

Germany's parliament approved the nation's first annual budget since sweeping reforms to loosen fiscal rules were passed earlier this year. In France, hundreds of thousands took part in anti-austerity protests, unions said, urging President Emmanuel Macron and his new Prime Minister Sebastien Lecornu to acknowledge their anger and scrap looming budget cuts.

The yield on German 10-year Bunds DE10YT=RR, the benchmark for the euro zone bloc, rose 1.2 basis points to 2.727%.

Oil prices fell. Brent crude futures LCOc1 dropped 0.8% to settle at $67.44 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 fell 0.8% to settle at $63.57.

Gold prices took a breather from record highs. Spot gold XAU= fell 0.38% to $3,645.89 an ounce.