“What’s most important here is that the market is just so comfortable with a somewhat hawkish Fed and we can even go as far as saying hawkish commentary is now being taken as an equity positive,” said Chris Weston, chief market strategist at spreadbettor IG, in a note.
In the currency market, the dollar slipped against a basket of currencies to trade at 101.09 as of 7:22 a.m. HK/SIN, down from an earlier high of 101.76. The yen traded at 114.23 against the greenback, while the euro fetched $1.0597 and the Australian dollar was at $0.7710.
Kathy Lien, managing director of foreign exchange strategy at BK Asset Management, said in a note the dollar’s decline against major currencies was likely a surprise to many, “considering the strength of the latest U.S. economic reports, the new highs in U.S. stocks and rise in Treasury yields.”
Lien said the loss of momentum in the dollar likely came from an “unexpected decline in industrial production” and Yellen’s remarks on the economy.
“Investors latched onto these words even though she spent more of her Congressional testimony talking about solid consumer spending, and the pickup in business and consumer confidence,” she said.
The Dow Jones industrial average closed up 107.45 points, or 0.52 percent, at 20,611.86. The S&P 500 index closed up 11.67 points, or 0.5 percent, at 2,349.25, while the Nasdaq gained 36.87 points, or 0.64 percent, at 5,819.44.
