Federal Reserve Chair Janet Yellen spoke to Congress on Tuesday in her first congressional testimony since President Donald Trump took office, and bank stocks are rising.

In the speech, Yellen stressed the importance of mitigating financial regulation, specifically the Dodd-Frank financial reforms created after the Great Recession. 

Yellen said that she would work with Treasury Secretary Steven Mnuchin to conduct a comprehensive review of post-crisis regulations and told the Senate Banking Committee it was important for regulators to constantly be looking for ways to reduce the burden on institutions.

She described the exercise in reducing the regulatory burden as a "legitimate and important goal" for the Fed and other regulators. 

Financials are soaring on the back of the news.

David Fuller's view

This is very positive and largely unexpected news from the Fed Chairman.  Bank shares soared again, as one would expect.

In terms of overall leadership, strong bank shares are a very positive indicator for the broader market.  Conversely, persistently weak bank shares (shades of 2008) are a clear warning. Here are four  Wall Street banks: Goldman Sachs up 1.16% today, Citi Group up 1.49%, JPMorgan up 1.15%, Bank of America up 2.31%.

Wall Street’s indices remain inform.