Wall Street, European Stocks Jump on Powell’s Second Term News

Wall Street shares rose to record levels on Monday and European stocks turned into the positive territory after US President Joe Biden picked Jerome Powell to continue as Chair of the Federal Reserve Bank, in a move welcomed as a signal of stability by global investors.

The S&P 500 rose 0.92% to 4,741.35 and the Nasdaq Composite 0.81% to 16,188.17 by 10:35 a.m. EST (1535 GMT). The Dow Jones Industrial Average rose 251.02 points, or 0.71% to 35,853.

Lael Brainard has been appointed as vice chair. Powell’s current term has proved positive for risk assets, with the S&P gaining 69.7% since his appointment. The U.S. dollar rose 0.34% against a basket of other major currencies.

European stocks were also higher after the news. Earlier on Monday’s session they had been hit as traders weighed the likely impact of fresh European COVID-19 restrictions on economic prospects.

Europe’s STOXX 600 equity benchmark trimmed losses to rise 0.26%, while an MSCI gauge of European shares was down 0.5%. Germany’s acting Chancellor Angela Merkel was quoted as saying that Europe’s biggest economy needs tighter measures to control the current highly dramatic situation of coronavirus infections.

Austria powered down public life on Monday as its fourth national COVID-19 lockdown began, the first in a western European country.