U.S. stocks rallied again Tuesday and the Nasdaq Composite closed at an all-time high as investors waded into shares of technology and other growth stocks.Most major stock sectors rose Tuesday, extending the sharp gains indexes enjoyed a day earlier. Shares of big tech companies, though, appeared to get the most attention from investors. Stocks like
and Facebook all soared Tuesday, while
market cap briefly rose above $2 trillion and
came within striking distance of its first closing record since September. Tuesday’s gains came as Federal Reserve Chairman Jerome Powell continued to reiterate that the recent increase in inflation will likely prove temporary. Speaking before Congress on Tuesday afternoon, Mr. Powell said the central bank will wait for actual inflation to take root before raising interest rates.
Any indications from the Fed that it won’t move aggressively to raise interest rates have been hailed by investors. Many have taken it as a signal to resume their buying of tech and other growth stocks, which have been hard hit in recent months by the inflation fears.
“There’s a realization that this is a really ripe environment and interest rates remain low,” said Patrick Leary, chief market strategist and senior trader at Incapital. “The Fed is planning to be very accommodative to the economy over the next 24 months.”
Mr. Leary said investors’ attention will likely shift to Friday’s release of the Fed’s preferred inflation gauge, the core personal-consumption-expenditures price index, for further insight into whether cost hikes are truly transitory.
“We’re likely to still see volatility around those types of prints,” Mr. Leary added.
The S&P 500 rose 21.65 points, or 0.5%, to 4246.44, leaving the broad index 0.2% away from its June 14 record. The Nasdaq Composite closed at a record after gaining 111.79 points, or 0.8%, to 14253.27. The Dow Jones Industrial Average also rose, adding 68.61 points, or 0.2%, to 33945.58.
Nine of the 11 major S&P 500 sectors rose Tuesday. The two laggards were real estate and utilities.
Consumer discretionary stocks in the index were out front, gaining 1%. Tech and communication stocks were also strong, with Netflix adding $11.82, or 2.4%, to $508.82, Facebook gaining $6.74, or 2%, to $339.03 and Twitter rising $1.82, or 2.9%, to $63.78.
Other growth stocks also rallied, including Spotify, up $8.04, or 3.3%, to $253.64, and
Zoom Video Communications,
which added $5.40, or 1.5%, to $374.65.
Helping the growth trade was a pullback in bond yields as prices rose. The yield on the 10-year U.S. Treasury note edged down to 1.471%, from 1.481% on Monday.
Other individual gainers included GameStop, whose shares rose $20.03, or 10%, to $220.40 after the videogame retailer said it had raised over $1 billion from the sale of shares. Meanwhile, Sanderson Farms added $17.20, or 10%, to $183.78 after The Wall Street Journal reported that the company is exploring a sale, according to people familiar with the matter.
Overseas, the Stoxx Europe 600 index added 0.3%. Japan’s Nikkei 225 index jumped 3.1% by the close of trading. In China, the Shanghai Composite Index added 0.8%. Hong Kong’s Hang Seng Index edged down 0.6%.
The New York Stock Exchange on Monday.
Write to Will Horner at William.Horner@wsj.com and Michael Wursthorn at Michael.Wursthorn@wsj.com
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