Stock Investors Betting Powell’s Testimony Won’t Rock Bullish Sentiment

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Most equity indexes in Asia advanced early Tuesday, following the strong lead of the U.S. equity markets on Monday. Japan's Nikkei extended its 1.19 percent gain from the previous session by closing up 285.75 points, or 1.29 percent. The rally was led by strong performances in the technology, financials and manufacturing sectors.

U.S. Equity Markets

The major U.S. equity indexes posted sharply higher gains on Monday amid a stabilization in U.S. Treasury yields, which drove up demand for higher risk assets.

Some investors also bet Federal Reserve Chair Jerome Powell will flag up an intention to steer a steady course on U.S. monetary policy when he addresses U.S. lawmakers on Tuesday and Thursday. The Fed, looking past the recent stock market correction and concern about inflation, said on Friday it sees steady growth continuing and no serious risk on the horizon that might pause its planned pace of rate hikes.

The major U.S. stock indexes have regained more than half of their correction-level losses. As of Monday's close, the Dow and S&P 500 is now down 3.4 percent and 3.25 percent respectively from their 52-week intraday highs.

In the cash market, the benchmark S&P 500 Index settled at 2779.60, up 32.30 or 1.18%. The blue chip Dow Jones Industrial Average closed at 25709.27, up 399.28 or 1.58% and the tech-based NASDAQ Composite finished the session at 7414.97, up 77.58 or 1.05%.

The Dow was carried by strong gains in Boeing and 3M. The S&P was driven higher by strong performances in telecommunications, technology and financials stocks. The NASDAQ was supported by a sharp 2-percent rise in Apple shares and a 2.8 percent gain in Intel.

Most importantly, the CBOE Volatility Index or VIX, the stock market's best fear gauge, hit a low of 15.97, its lowest level since February 2.

U.S. Treasury Yields

U.S. Treasury yields retreated on Monday after reaching four-year highs a little under 3 percent last week. The 10-year yield neared its lowest level since February 14, when the 10-year yielded as low as 2.808 percent.

Yields likely fell in anticipation of testimony from new Federal Reserve Chair Jerome Powell on Tuesday and key inflation data that are expected to keep fixed-income markets on edge this week.

This article was originally posted on FX Empire


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Bonds , US Markets , World Markets
Referenced Symbols: SPX

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