Stocks have rediscovered their passion for gains after a shaky morning, helped by a lack of any big news from Jerome Powell’s testimony.

Stocks reverse morning losses

“Indices were clearly demonstrating pre-Powell nerves this morning, as a reversal threatened to undo the bounce seen in the first two days of the week. But the Fed chairman has avoided saying anything so far that will unnerve investors. Indeed, with little in the way of central bank decisions this week, a fairly uncommunicative Powell was just what the market needed to rally, and so it has proved. The Fed chairman has added little to what we know already, and so perhaps risk assets feel a bit better about rallying than they did when European markets opened this morning.”

Oil prices slump to one-month low

“Fears about inflation will certainly have been soothed to an extent by the 4% drop in oil prices today. But the fall is a function of continuing fears about a US recession, which is at least one way to cool demand, although it is perhaps not the way central banks and governments would like to solve the problem.”

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