US Shares Reclaim Losses On Back Of Powell’s Remarks

The S&P 500 has reclaimed 4700 on Tuesday amid broad US equity market upside as tech recovers post-Powell remarks. The index has recovered more than 2.8% from Monday’s sub-4600 lows.

The lack of any fresh hawkish surprises seemed to give the green light for a technical reversal of recent moves. Having managed to clear its 21-day moving average to the upside, the S&P 500 continues to march higher as the end of Tuesday’s session draws closer and has recently crept back above the 4700 level.

The upside in US shares, which has been concentrated in the recently heavily hit tech sector, was spurred with a reversal lower in US real and nominal bond yields after remarks from Fed Chair Jerome Powell. Speaking at a hearing with the Senate Banking Committee for his re-nomination as Fed Chair.

Powell stuck to the script of remarks and reiterated the main takeaways from last week’s hawkish Fed minutes. Traders were enthused by the lack of surprises or any fresh hawkish language to spur further hawkish Fed bets, hence the tech-led reversal higher in shares and lower in yields.

The US inflation report due tomorrow is likely to show that inflationary pressures persisted at the end of the year.

The Dow Jones added as much as 180 points after falling more than 250 points earlier in the session, and the S&P rose 0.9%, both indexes snapped a 5-day losing streak. Meanwhile, the tech-heavy Nasdaq Composite extended previous session gains and jumped 1.4% as investors are buying tech stocks in a “buy the dip” movement.

On the corporate front, Illumina soared 15.6% after the company issued a 2022 revenue outlook above the consensus. Also, Exxon Mobil gained more than 4% tracking higher oil prices, while shares of Intel rose 0.9% after the company named Micron Technology Chief Financial Officer David Zinsner as its new CFO.