The Dow Jones Industrial Average bounced back from steep losses and closed the session in the green on Tuesday after Federal Reserve Chair Jerome Powell relieved some of the concerns about higher interest rates and inflation.
The blue-chip Dow wiped out a 360-point loss and closed 15.66 points higher, or 0.1%, at 31,537.35.
The S&P 500 also reversed a 1.8% loss and ended the day 0.1% higher at 3,881.37.
The Nasdaq Composite slipped 0.5% to 13,465.20 after dropping as much as 3.9% earlier. At its session low, the tech-heavy benchmark fell below its 50-day moving average, a key technical indicator, for the first time since Nov. 3 on an intraday basis.
The intraday turnaround came after Powell said in his testimony to Congress that inflation is still “soft” and the economic outlook is still “highly uncertain,” easing fears of a policy change by the central bank.
“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” the Fed chief said in prepared remarks for the Senate Banking Committee.
Inflation fears have risen in recent weeks amid a sharp rise in bond yields as policymakers debate another round of economic relief. Investors worry that a spike in prices due to federal stimulus could force the central bank to raise short-term borrowing costs.
Energy and financials — two of the best-performing sectors this year — once again supported the market Tuesday as investors snap up names they think will benefit from an economic recovery. The energy sector gained 1.6%, bringing its 2021 rally to nearly 27%.
Reference: CNBC
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