The Dow Jones Industrial Average closed the day up 194.23 points, or 0.64%, while the S&P 500 rose 0.95% and the Nasdaq Composite added 1.62%.
Powell on Thursday testified that the central bank’s plan to aggressively hike interest rates — designed to drive growth down to a more sustainable level to give the supply side time to catch up with demand — could result in an increase in unemployment.
“There is a risk that unemployment will move up, from what is an historically low level though,” Powell said.
The Labor Department on Thursday reported that new unemployment filings for the week ending June 18 totaled 229,000, following a five-month high last week.
Markets have see-sawed this week with Thursday’s gains coming after losses in the previous session.
All three major indexes are on track to post gains for the week with the Dow up 2.6%, the S&P rising 3.3.% and the Nasdaq gaining 4%.
“The market action that we’ve seen today and yesterday at least on the internals suggests that the market is becoming increasingly concerned with the global economic growth,” Scott Ladner, chief investment officer at Horizon investments said.
Real estate and healthcare stocks were the best performing sectors, each rising about 2%. Consumer stocks also climbed with Clorox gaining 6%.
Homebuilders were also on the rise with Lennar gaining 4.51% and D.R. Horton stock climbing 5.13%.
Conversely energy was the worst performing sector in the S&P with Valero Energy falling 7.5%, Phillips 66 dropping 6.78% and Schlumberger declining 6.77%.