By Yasin Ebrahim

Investing.com – The S&P 500 steadied Tuesday as tech continued its rebound as U.S. bond yields edged lower after Federal Reserve Chairman Jerome Powell delivered less hawkish than expected remarks, soothing fears of aggressive Fed policy tightening. 

They rose 0.8% and gained 0.5% (185 points), while the Nasdaq increased 1.3%.

Powell stated that the Fed intends to normalize policy and stop bond buying, hike rates, and let bonds on its balancesheet mature this year.

“I would expect that this year 2022 will be the year in which we take steps toward normalization [of monetary policy],” Powell said.

That would involve “ending asset purchases in March, raising rates over the course of the year  … and “perhaps later this year, we will start to allow the balance sheet to run off.”

The soaring Treasury yields that had been weighing on tech growth, but took a break, helped to support the recovery in tech and push the wider market higher.

Meta Platforms (NASDAQ:), formerly know as Facebook, Amazon (NASDAQ:), Apple (NASDAQ:) and Microsoft (NASDAQ:), Alphabet (NASDAQ:), which make up about a quarter of the S&P 500.

The recent pullback in tech was linked to “to the fear of a Fed being more hawkish and more aggressive in its policies going forward … but Powell calm the markets in his hearing,”  Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com on Tuesday.

“The most powerful lever the Fed has to pull on right now is starting to shrink its balance sheet by selling bonds,” Schuringa added. “But Powell backed away that saying we’re going to let our balance sheet roll off … that’s not as disruptive in the market as selling bonds.” 

After a nearly 2% increase in Advanced Micro Devices’ (NASDAQ:), KeyBanc raised its stock rating to overweight, from sector weight. KeyBanc cited cloud data center growth for 2022. Semiconductors have continued to reduce recent losses.

Oil was another top-earning asset on the day. This is because oil prices rose higher in anticipation of the lower demand for crude oil due to the possibility that it may not be as devastating as initially thought.

Occidental Petroleum, Hess (NYSE :), and APA (NASDAQ 🙂 led the rise of the energy sector with the former up by more than 8%.

As a sign that there is a renewed interest in risk assets, the markets for utilities and consumer staples are now on the defensive side.