Oil drops, and Wall Street rises hours after the Federal Reserve president’s testimony about the possibility of a market recession.

After the Red Bull Reserve president testifies, Wall Street closes Thursday evening trading hours with a mixed performance. Jerome Powell says today that the US might face an economic slowdown and a mid-term recession at best.

The oil market dropped hours after Powell’s talks, and the Wall Street major three industries gained and closed in a favourable position.

The S&P rose by 0.6%, the Nasdaq composite gained 1.33% and the Dow Jones Average industrial climbed by 0.35%. Over the past 8 weeks, the S&P’s performance was mixed with more losses than gains, making it into the bear market territory. Tech stocks are vulnerable due to the shipbuilder shortage and the increase in utility prices. The housing market in the US is expected to be the first hit when the recession hits.

On a yearly basis, the Nasdaq is down by more than 30% and the S&P by more than 26%, making the possibility of a rescission higher than it was in pandemic times.

As for the treasury market, the US 10-year treasury yield declined to 3.07 for the second day since Tuesday this week. Experts believe that the next week the treasury will increase because of Powles’ testimony this morning.

The Federal Reserve president added in his testimony that the FED remains committed to its mission. Fight inflation at any cost, even if that means the economy will slow down. Last Wednesday, the federal reserve policymakers and central banks increased their interest rates by 75bs, the most significant increase since 1994. Accordingly, and based on policymakers’ comments, the FED might add another three-quarters interest hike in the next meeting.

In terms of the market’s current state, the FED remains weak against its complexities. Manufacturing and service activity in June was below expectations, and weekly jobless claims are on the rise.

The increase in energy and utility problems is another issue that the White House has been facing these past few months. The Russian military operation continues as more victims fall in the fields. The Russian troops are marching from one city to another.

It has caused uncertainty in the global market and set fire to oil prices from one week to another.

Today, the oil market dropped slightly but returned to its high. Brent oil declined to $104 per barrel. The same goes for the West Texas intermediate. Over the past 10 days, WTI prices dropped from $120.93 per barrel to $104 per barrel. These swings in oil prices made investors’ sentiments a bit overwhelmed since it is volatile.

As for the commodity market, gold is still under the $1900 per ounce price, with no signs of increasing in the next few weeks. However, if a recession comes, traders believe that a downturn is what gold needs to break the $2000 curse.