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Wall St bounces as tech stocks rise after Powell’s testimony

U.S. stocks rose Tuesday afternoon, led by a rebound in shares of technology companies, as Federal Reserve Chairman Jerome Powell reiterated the central bank’s efforts to corral inflation.


Stocks opened lower and dipped further as senators peppered Mr. Powell with questions during his reconfirmation hearing for a second term as Fed chair. Indexes later recovered.


The S&P 500 added 0.6%, on pace to snap a five-day losing streak, while the Nasdaq Composite added 1.2%, building on Monday’s midday turnaround. The Dow Jones Industrial Average was up 0.3%.


During the hearing, Mr. Powell said the central bank plans to move as aggressively as needed to cool inflation. “If we have to raise interest rates more over time, we will,” he told lawmakers.


The bank has made no decisions about shrinking its balance sheet, he added, saying also that “it’s a long road to normal” for monetary policy.


Stocks have been volatile as the prospect of imminent and faster-than-expected interest-rate rises has convulsed financial markets this month. For Mr. Powell’s part, he played up the central bank’s role in taming inflation, while reiterating that that interest rates are likely to remain at historically low levels. He added that he was


optimistic that supply-chain bottlenecks would ease this year to help bring down inflation.


Still, investors remained jittery as stock indexes stayed volatile.


“There is more of a risk now that rate rises are going to coincide with falling growth, and that is obviously a bad combination,” said Altaf Kassam, head of investment strategy for State Street Global Advisors in Europe.


During the hearing, investors bought the dip on tech and other growth stocks. The tech and communication services sectors of the S&P 500 both rose recently about 1%, after trading in the red earlier in the session, while consumer discretionary stocks also added 1%.


Amazon.com rose 2.4%. Facebook parent Meta Platforms and Apple added more than 1%.


Energy stocks added nearly 3%, coinciding with a rise in oil prices.


Other stocks making big individual moves included Illumina, which added 12% after posting earnings late Monday that beat analysts’ expectations. Shares of Rivian Automotive added 4.5%, recouping some of the more-than-5% drop Monday when The Wall Street Journal reported that the electric-truck maker’s chief operating officer had departed. Albertsons fell over 5%, despite the grocery chain reporting higher quarterly sales.


More defensive corners of the stock market fell, including utilities, consumer staples and real-estate firms.


A rally in government bond yields halted, a day after the 10-year Treasury yield settled at a 52-week high. The yield on the benchmark bond edged down to 1.757% Tuesday from 1.779% Monday.

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