GLOBAL MARKETS-Stocks rise as yields hit two-week low; copper slumps

* Defensive stocks lead Wall Street higher amid recession fears

* Crude oil futures extend losses in volatile trade

* U.S. Treasury yields at 2-week low (Updates with early U.S. market activity, changes byline, dateline, previous LONDON)

By Caroline Valetkevitch

NEW YORK, June 23 (Reuters) - Stocks on global indexes rose on Thursday as U.S. Treasury yields fell to a two-week low, while copper was at 16-month lows amid fears of a global economic slowdown.

Fed Chairman Jerome Powell is testifying before Congress for a second day Thursday, a day after saying the Fed is committed to cutting inflation at all costs, and acknowledged a recession was "certainly a possibility."

Investors have been weighing the risk of hefty interest rate rises tipping economies into recession.

"What we're seeing here is a (stock) market trying to absorb the Fed's tightening and basically trying to put in a low in a bear market," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

"We have yields that are coming down, and so that's helping stocks. The market has discounted a lot, and yesterday Powell basically acknowledged they're going to do everything to fight inflation... for now, the market has probably discounted somewhat of a mild recession."

Gauges of factory activity released Thursday in Japan, Britain, the euro zone and United States all softened in June, with U.S. producers reporting the first outright drop in new orders in two years.

Manufacturing growth is slowing worldwide partly because China's COVID-19 curbs and Russia's invasion of Ukraine have disrupted supply chains and added to inflation problems.

Nasdaq led the way higher on Wall Street, and technology and growth shares were outperforming.

The Dow Jones Industrial Average rose 153.4 points, or 0.5%, to 30,636.53, the S&P 500 gained 32.04 points, or 0.85%, to 3,791.93 and the Nasdaq Composite added 164.29 points, or 1.49%, to 11,217.37.

The pan-European STOXX 600 index lost 0.61% and MSCI's gauge of stocks across the globe gained 0.44%.

In the bond market, yields have dropped from more-than-decade highs reached before last week’s Fed meeting, when the U.S. central bank hiked rates by 75 basis points, the biggest increase since 1994, and signalled a similar move is possible in July.

Benchmark 10-year notes last rose 35/32 in price to yield 3.0275%, from 3.156% late on Wednesday.

Copper prices slumped as rising interest rates and weak economic data increased worries about a slowdown that would hurt demand for the metal.

Copper on the London Metal Exchange (LME) was down more than 3% and hit its lowest since February 2021.

In the foreign exchange market, the dollar index rose 0.038%, with the euro down 0.34% to $1.0529.

U.S. crude recently fell 0.96% to $105.17 per barrel and Brent was at $110.86, down 0.79% on the day.

(Additional reporting by Huw Jones in London and by Sujata Rao, Editing by Clarence Fernandez, David Evans and Nick Zieminski)