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© Reuters. Employees of the foreign exchange trading company Gaitame.com work in front of monitors showing the Japanese yen exchange rate against the U.S. dollar, the euro and Nikkei share average at its dealing room in Tokyo, Japan June 22, 2022. REUTERS/Issei Kato
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By Caroline Valetkevitch
NEW YORK (Reuters) – Major U.S. stock indexes rose on Wednesday after Federal Reserve Chair Jerome Powell said the U.S. central bank is “strongly committed” to bringing down inflation, while benchmark Treasury yields eased.
Stocks turned positive following the comments by Powell in testimony to the U.S. Senate Banking Committee. The U.S. dollar slipped and the fell 0.431%.
“The market is reading it favorably. … He’s strongly committed to attacking inflation,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York. “He’s sensitive that higher rates are going to hurt parts of the economy, but it’s needed to create price stability.”
The Fed recently raised its benchmark overnight interest rate by three-quarters of a percentage point – its biggest hike since 1994.
Nasdaq led gains on Wall Street.
The rose 31.4 points, or 0.1%, to 30,561.65, the gained 10.22 points, or 0.27%, to 3,775.01 and the added 72.36 points, or 0.65%, to 11,141.66.
The pan-European index lost 0.67% and MSCI’s gauge of stocks across the globe shed 0.22%.
Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 2.3% to close to a five-week low.
Investors are continuing to assess how worried they need to be about central banks potentially pushing the world economy into recession as they attempt to curb inflation with interest rate increases.
Minutes from the Bank of Japan’s April policy meeting released Wednesday showed the central bank’s concerns over the impact the plummeting currency could have on the country’s business environment.
The Japanese yen strengthened 0.53% to 135.89 per dollar.
In Treasuries, benchmark 10-year yields were at 3.151% after reaching 3.498% on June 14, the highest since April 2011.
In commodities, recently fell 4.56% to $104.53 per barrel and was at $109.76, down 4.27% on the day.
Investors digested news of a plan by U.S. President Joe Biden to cut fuel costs for drivers.
added 0.4% to $1,839.71 an ounce.
