Wall Street saw a reprieve in the economy on Tuesday as stocks and oil prices rallied. As of 2:40 pm EST, the DOW was up by 439.14 points and front-month Brent crude was up by 73 cents. Brent futures had fallen to its weakest since January at $60.21 but managed to rebound to its current level at $62.01.
Comments from Jerome Powell, the U.S. Federal Reserve Chairman, were attributed as the cause of the rebounding stocks. Powell earlier commented that interest rates may be cut if trade tensions continued to damage the economic outlook.
“We do not know how or when these issues will be resolved,” Powell said. “We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective,” he explained.
A statement from Saudi Arabia’s energy minister also implied that a consensus among oil producers to limit output for the remainder of the year is growing.
The global stocks rallied amid the comments from Powell. Previously, oil was down to a four-month low due to global concerns about growth. Russia’s leading oil producer also had announced that it would avoid cuts with OPEC until the end of the year.
Energy markets have been selling off in recent days on concerns about the global economy triggered by the U.S. and China trade war. The more recent threat of U.S. tariffs on Mexican imports further drove global concerns. May posted the sharpest decline on oil futures since November 2018.
In addition to the DOW and Brent crude futures, the U.S. West Texas Intermediate crude also stood higher at $53.48 a barrel on Tuesday. The Nasdaq was also up by 159.79 points and the S&P was up by 48.41.