(Updates prices and details) Wall Street slumped on Thursday...

(Updates prices and details)

Wall Street slumped on Thursday and global stock markets declined after U.S. Federal Reserve Chair Jerome Powell repeated his pledge to keep credit flowing until Americans are back to work, rebutting investors who have openly doubted he can stick to that promise once the pandemic passes.

Benchmarket U.S. Treasury yields rose toward last week's highs as Powell spoke, and the dollar hit a three-month high.

Oil prices spiked to their highest in over a year as OPEC and its allies agreed to extend most oil output cuts into April, after deciding that the demand recovery from the pandemic remained fragile.

With COVID-19 vaccines rolling out and the government fiscal taps open "there is good reason to think we will make more progress soon" toward the Fed's goals of maximum employment and 2% sustained inflation, Powell told a Wall Street Journal forum.

But "even if that happens it will take substantial time," Powell added.

The Dow Jones Industrial Average .DJI fell 345.95 points, or 1.11%, to 30,924.14, the S&P 500 .SPX lost 51.25 points, or 1.34%, to 3,768.47 and the Nasdaq Composite .IXIC dropped 274.28 points, or 2.11%, to 12,723.47.

"This market has already been weak and was looking for another excuse to sell," said Dennis Dick, head of markets structure and a proprietary trader at Bright Trading LLC in Las Vegas, citing fear in equities markets for the past nine months. "Now, Powell gives them that excuse as well."

The pan-European STOXX 600 index .STOXX lost 0.37% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 1.62%, its third day of losses.

Emerging market stocks lost 2.61%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 2.63% lower, while Japan's Nikkei .N225 lost 2.13% to its lowest since Feb. 5.

Worries about loftier U.S. bond yields have also hit global shares.

Powell said the increase was "notable" but he did not consider it a "disorderly" move, or one that pushed long-term rates so high the Fed might have to intervene to bring them down.

Benchmark 10-year notes US10YT=RR last fell 21/32 in price to yield 1.5432%, from 1.47% late on Wednesday. They earlier touched their highest levels since a one-year high of 1.614% set last week on bets on a strong economic recovery aided by government stimulus and progress in vaccination programs.

The cost of borrowing U.S. Treasuries in the overnight repurchase agreement, or repo market, went negative on Thursday, analysts said, amid the bond market sell-off, which pointed to stress in money markets.

The 10-year UK Gilts yield was last at 0.733%, after touching 0.775% GB10YT=RR on Wednesday, near last week's 11-month high of 0.836%.

Germany's 10-year yield DE10YT=RR was down 2 basis points to -0.33% after rising 5 basis points on Wednesday.

Many Fed officials have downplayed the rise in Treasury yields in recent days, although Fed Governor Lael Brainard on Tuesday acknowledged that concerns over the possibility of a rapid rise in yields could dampen economic activity.

The dollar surged to three-month highs after Powell failed to express concern about a recent sell-off in U.S. Treasuries as some traders had expected, resulting in higher bond yields and demand for the greenback.

The dollar index =USD rose 0.562%, with the euro EUR= down 0.77% to $1.1969.

The Japanese yen weakened 0.83% versus the greenback. Dollar/yen JPY= rose to 107.89, roughly a seven-month high, while sterling GBP= was last trading at $1.3893, down 0.43% on the day.

Rising Treasury yields pushed non-interest-bearing gold XAU= down 0.9%. Spot gold XAU= dropped 0.7% to $1,698.70 an ounce, but still near a nine-month low.

The U.S. Senate voted on Thursday to take up President Joe Biden's $1.9 trillion coronavirus aid bill, setting up what is likely to be a days-long debate.

Oil prices rose for a second straight session. U.S. crude CLc1 recently rose 4.72% to $64.17 per barrel and Brent LCOc1 was at $67.16, up 4.82% on the day.

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