NEW YORK (Reuters) – A gauge of global equity markets rose on Wednesday after Federal Reserve Chair Jerome Powell said interest rates will remain low, calming market jitters sparked by a jump in U.S. Treasury yields on fears that a robust recovery would drive inflation higher.

Sales of new U.S. single-family homes increased more than expected in January as the median sale price rose 5.3% on a year-over-year basis, the latest data to show certain consumer prices are rising faster than expected.

Crude oil rose more than 2% to fresh 13-month highs while gold prices struggled for traction as elevated Treasury yields eroded the allure of bullion as an inflation hedge.

The dollar slid to multi-year lows against the pound and commodity-linked currencies including the Canadian, Australian and New Zealand dollars, as they are expected to benefit from a pick-up in global trade as world growth rebounds.

MSCI’s all-country world index, a gauge of equity markets in 49 countries, added 0.30%, as rising stocks on Wall Street pushed the global benchmark to reverse early losses.

Progress in the rollout of coronavirus vaccines, which was boosted by news that Johnson & Johnson’s one-shot vaccine appeared safe and effective, has increased economic optimism but also inflation concerns, said Patrick Leary, chief market strategist and senior trader at Incapital in Minneapolis.

“If you look at commodity prices, you look at real estate prices and you look at energy prices, they’re up significantly higher than even pre-pandemic levels,” Leary said.

In testimony before the U.S. House of Representatives Financial Services Committee, Powell reiterated the Fed’s promise to get the American economy back to full employment and to not worry about inflation unless prices rise in a persistent and troubling way.

While rising yields give stock investors pause, the Fed is “pretty comfortable” with them as they take some of the froth out of the financial system, Leary said.

The 10-year U.S. Treasury note rose almost 1 basis point to yield 1.3722% after hitting 1.435% earlier. The benchmark Treasury yield traded at 0.912% at the end of 2020.

The sliding of 10-year Treasury yields below the 1.4% mark helped equity markets rebound from early losses, but the rotation out of technology stocks continued, with Amazon.com Inc and Apple Inc leading Wall Street lower. In Europe, the tech sector has lost nearly 4% this week.

The Dow Jones industrial average set a record high, rising 1.35%. The S&P 500 gained 1.14% and the Nasdaq Composite advanced 0.99%.

GameStop Corp stock, at the center of volatile moves in late January as its shares were talked about on a Reddit forum, more than doubled in price in late trading, and continued to soar in post-market trade in heavy trade.

Europe’s broad FTSEurofirst 300 index closed up 0.4% at 1,590.09 after earlier trading lower on inflation fears.

The benchmark 10-year German Bund was steady after yields jumped on Tuesday.

A sharp rise in real bond yields in line with those seen during previous “bond tantrum episodes” would reduce the upside potential for European equities, BofA Global Research said.

Sectors set to benefit from a stronger economy were supported by German GDP data, as exports and solid construction activity helped Europe’s biggest economy to grow by a better-than-expected 0.3% in the fourth quarter.

Germany’s DAX rose 0.8%.

Falling tech stocks, which are sensitive to rising yields, pulled Asian markets lower overnight.

Bitcoin traded little changed, down 0.3% at $48,720.00.

The dollar index fell 0.063%, with the euro up 0.12% to $1.2164. The Japanese yen weakened 0.59% versus the greenback to 105.86 per dollar.

Oil prices rose after U.S. government data showed a drop in crude output after a deep freeze disrupted production last week.

Brent crude futures settled up $1.67 at $67.04 a barrel, while U.S. crude futures rose $1.55 to settle at $63.22 a barrel.

Brent and U.S. West Texas Intermediate (WTI) crude futures have both risen by about 28% so far in 2021.

U.S. gold futures settled down 0.4% at $1,797.90 an ounce.

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