Wall Street rallies on Powell testimony

Big name tech and energy stocks spearheaded a rebound on Wall Street Tuesday, helping the S&P 500 snap a five-day losing streak.

Investors took relief in Federal Reserve Chair Jerome Powell’s testimony on Capitol Hill, where he said the economy was ready for the start of tighter monetary policy as the Fed shifts its focus to fighting inflation.

O’Neil Global Advisors Senior Portfolio Manager Randy Watts said Wall Street liked what it heard.

“I think the markets are relieved that the Fed is taking inflation more seriously. I think the market believes the Fed is a little bit behind the curve. I am personally hopeful that some of the supply chain issues that hurt the economy last year are going to start to ease up in the first half of this year.”

The Dow gained a half percent. The S&P 500 rose nearly 1%. And the Nasdaq shot up 1.4%.

Among the S&P’s top gainers: Las Vegas Sands, up nearly 7%. J.P. Morgan upgraded the stock of the casino operator to “overweight.”

Shares of Moderna fell more than 5%. The World Health Organization said more research is needed to determine if existing COVID-19 vaccines offer adequate protection against the Omicron variant.

Inflation-obsessed investors will closely eye the Consumer Price Index that comes out tomorrow. Economists expect an annualized rate of 7% in December, which would be well-above the Fed’s target.

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