By Caroline Valetkevitch
NEW YORK (Reuters) - Global stock indexes rallied on Tuesday as U.S. tech shares bounced back from the previous day's selloff and investors weighed the possibility of a U.S. interest rate cut, while yields on U.S. Treasuries rose.
Longer-dated Treasury yields climbed back from their lowest since September 2017.
Federal Reserve Chairman Jerome Powell said the U.S. central bank will respond "as appropriate" to the risks posed by a global trade war and other recent developments.
His remarks followed St. Louis Fed President James Bullard's comments late on Monday that a rate cut "may be warranted soon."
Strategists said the comments suggested the Fed is considering its options.
Equity "investors are taking comfort in what appears to be a Fed that is contemplating cutting rates if the economy materially slows down," said Michael Geraghty, equity strategist at Cornerstone Capital Group in New York.
In a brief statement included as part of a speech on broader monetary policy issues, Powell said the Fed was "closely monitoring the implications" of ongoing trade disputes.
The United States' trade war with China and other countries has been escalating in recent weeks, increasing market uncertainty and worries about the global economy for investors.
U.S. technology stocks bounced back from Tuesday's sharp selloff, driven by worries about a clamp-down on the world's internet and social media giants. The Nasdaq also confirmed a correction at the day's close, falling more than 10% from its May 3 record high.
The Dow Jones Industrial Average rose 424.07 points, or 1.71%, to 25,243.85, the S&P 500 gained 46.15 points, or 1.68%, to 2,790.6 and the Nasdaq Composite added 151.06 points, or 2.06%, to 7,484.08.
The pan-European STOXX 600 index rose 0.59% and MSCI's gauge of stocks across the globe gained 1.13%.
In U.S. Treasuries, benchmark 10-year Treasury yields rose 5.70 basis points to 2.138% after hitting 2.061% on Monday, their lowest since September 2017.
Jitters over the global economy have pushed investors into top-rated government bonds and other safety plays in recent weeks.
The dollar was near steady after Powell's comments.
The dollar index rose 0.07%, with the euro up 0.08% to $1.1249.
The Japanese yen weakened 0.11% versus the greenback at 108.20 per dollar.
The rally in stocks helped oil prices, and gold prices eased off of a three-month peak.
U.S. crude rose 0.28% to $53.40 per barrel. Brent crude rose 0.7 percent to $61.71. Spot gold dropped 0.1% to $1,323.31 an ounce.