(CNBC) — The Dow Jones Industrial Average bounced back from steep losses and traded in the green on Tuesday amid a big rotation into stocks more linked to the economic recovery. Federal Reserve Chair Jerome Powell also relieved some of the concerns about higher interest rates and inflation.
The blue-chip Dow wiped out a 360-point loss and traded about 100 points higher. The S&P 500 rose 0.2% after falling as much as 1.8%.The Nasdaq Composite slipped 0.1%, paring a 3.9% loss earlier. At its session low, the benchmark fell below its 50-day moving average, a key technical indicator, for the first time since Nov. 3 on an intraday basis.
Stocks bounced off their lows after Powell said in his testimony to Congress that inflation is still “soft” and the economic outlook is still “highly uncertain,” easing fears of a policy change by the central bank.