Powell Comments Provide Support for Recovery in US Tech Stocks

Powell told the Senate Banking Committee on Tuesday that high inflation has taken a 'toll' on the economy and that the central bank would take steps to prevent it from 'becoming entrenched.'

However, Powell also stated that the central bank expects inflation to peak in the middle of the year, implying that a significant rate hike may not be required.

This halted a recent sell-off in Treasuries that began last week and escalated after minutes from the Fed's December meeting were released last week, signaling a more hawkish tone from the central bank.

After trading above 1.8 percent on Monday, the yield on the benchmark 10-year US Treasury note fell 0.02 percentage points to 1.74 percent. The yield on the two-year Treasury note, which closely reflects interest rate expectations, remained almost unchanged at 0.89 percent. It temporarily jumped to 0.94 percent earlier in the trading day, its highest level since February 2020.

The Nasdaq Composite index, which is heavily weighted in technology, rose 1.4 percent, the most in three weeks. On Monday, the index briefly fell into correction territory before rallying and finishing the session essentially flat.

The S&P 500 stock index increased by 0.9 percent, while the information technology sub-index increased by 1.2 percent.