The major US equity indexes were in the red on Tue, until Fed Chair Jay Powell began speaking before the Senate Banking Committee. Powell eased fears that the central bank will be overly aggressive on reducing its huge balance sheet.
The Dow Jones Industrial Average gained 183.15 pts, or 0.51%, to close at 36,252.02. The Dow snapped a four session losing streak. The S&P 500 index rose 0.92%. The Nasdaq Composite advanced 1.41%. It was the second day of advances for the tech heavy index. The small cap Russell 2000 climbed 1.05%.
Oil rose 4% to two-month highs, supported by tight supply and expectations that the spread of the Omicron variant will not derail a global demand recovery. The front-month Brent and WTI futures closed up $2.85 at US$83.72/bbl and $2.99 at US$81.22/bbl respectively. Oil and gas shares were among the best performers. Marathon Oil (MRO US, +5.19%) led gainers.
Albertsons (ACI US, -9.75%) and Kroger (KR US, -2.83%) fell on worries that omicron-fueled worker shortages and supply chain delays would hurt grocers.
The 10-year Treasury note yield slipped 2.47 basis points (bps) to 1.7357%.
The ICE dollar index (DXY), which measures the strength of the greenback against a basket of currencies, fell 0.38% to 95.624. That is close to a 5 ½ week low for the US dollar.
Goldbugs loved the combo of lower Treasury yields and a weaker US dollar. The most actively traded US gold futures (Feb) contracts settled up $19.70, or 1.1%, at US$1,818.50/oz. March silver, which is the most actively traded silver futures, rose 35 cents, or 1.6%, to end at US$22.812/oz.
European equity markets finished higher on Tue. The UK FTSE gained 0.62%, France's CAC 40 rose 0.95%, while the German DAX advanced 1.1%.