Global stocks jumped on Thursday after U.S. Federal Reserve Chair Jerome Powell reaffirmed interest rates would stay low for a long time, calming market fears that higher inflation might prompt the central bank to tighten monetary policy. Powell's reassurance gave a fresh impetus to reflation trades and boosted risk asset prices while also driving U.S. bond yields back up to one-year highs. In a second day of testimony in Washington, Powell reiterated the Fed's promise to get the U.S. economy back to full employment and to not worry about inflation unless prices rose in a persistent and troubling way.
The stock market has been volatile lately, but all concerns seemed to evaporate on Wednesday. Favorable comments from Fed chair Jay Powell continued to make investors more comfortable with the current state of affairs, and that helped markets recover from some choppy sessions earlier in the week. Today, energy stocks are once again in the spotlight, and powerhouse dividend payers ExxonMobil (NYSE: XOM) and Chevron (NYSE: CVX) are among the industry's giants leading the entire stock market higher.
The stock markets initially fell during the trading session on Wednesday due to a spike in 10 year yields but have turned around yet again.