Powell testimony lifts tech stocks and hits dollar

While US markets are heading higher the picture is more mixed in Europe, while the dollar is falling back as Powell sticks to his views on inflation.

• Powell testimony gives Wall Street a boost
• Dollar falls back as taper expectations are tapered
• FTSE 100 in the red but miners gain as commodity prices rally

Jerome Powell stuck to the script on monetary policy this afternoon, delighting those who think the current spike in prices will be temporary and frustrating those who had hoped the central bank chief would trim his sails into a growing wind of unease about the direction of inflation. Whether he moderates this line under sustained questioning remains to be seen, but for now the world’s most important central banker is remaining firmly ‘on-message’, holding fast to the stance he has maintained (more or less) all year. Early gains on Wall Street saw the Dow move above 35,000, while the S&P 500 has hit another record high, something it continues to do with astonishing regularity. Perhaps what also helped has been his reiteration that the Fed would act if needed, soothing fears that some harboured about Fed policymakers being asleep at the wheel. 

Powell’s testimony has knocked back the dollar, although given the greenback’s relentless rise of late this might not last. Nonetheless it has been enough to make waves in the commodity space, lifting gold and oil as well as other raw materials, and helping miners on the FTSE 100 to make gains. However the index remains in the red along with parts of Europe, with most of the index falling back even as banks and mining stocks make headway.  Once again it is growth stocks that have led the way on Wall Street, with Europe’s lack of big tech names proving a hindrance in a modest rerun of the themes of summer 2020.