The U.S. stock market is trading higher today after European markets bucked a 7-day losing trend to turn positive as well. Markets kept a close eye on Federal Reserve Chair Janet Yellen’s semi-annual commentary before Congress today. During her testimony, she indicated that the pace of rate hikes will probably not be slowed, reassuring traders that her outlook on the economy remains positive enough to continue monetary tightening measures.
Federal Reserve comments dominate the day
Yellen addressed the House Financial Services Committee today, presenting her outlook on the economy. During her statement, she indicated that rate hikes would continue despite current market turmoil. Yellen defended the Central Bank’s decision to implement a rate hike for the first time in ten years in December.
Crude prices have regained some strength as well today as the commodity partially reclaimed its earlier day’s losses. Oil prices took cues from the weekly stock report released by the U.S. Energy Information Administration today. The report indicated an unexpected draw in crude supplies. Analysts had estimated a 3.6 million barrel rise in oil supplies.
Europe surges, Asia registered losses
In the other parts of the globe, Asian indices registered a heavy sell-off with Japan and Australia having entered bear territory. Japan’s Nikkei fell by another 2.3% today, breaching its lowest level since October 2014 as a stronger yen dampened market sentiment. Australia’s market closed about 1.2% down, continuing its massive fall from yesterday.
Unlike its Asian counterparts, European markest maintained calm and continued heading higher. The biggest relief factor in Europe stemmed from a strong recovery in banking stocks, which were unloaded by investors earlier this week over concerns about credit quality. Deutsche Bank (NYSE:DB) gained the most after it made plans to buy back its own bonds.