US indices finished higher Tuesday as investors continue to gamble on a less hawkish Federal Reserve tightening.

With just days until the December inflation data, US indices finished higher Tuesday, despite a rise in Treasury rates, as investors continue to gamble on a less hawkish Federal Reserve tightening.

The Dow rose 0.56%, the Nasdaq jumped 1%, and the S&P 500 gained 0.69%.

The wider market was driven higher by communications services, which were supported by a surge in Netflix Inc, Meta Platforms, and Warner Bros Discovery.

Warner Bros. Discovery rose more than 8% when Bank of America included it to its list of greatest ideas.

Consumer goods and utilities, which often act as a bond proxy, tumbled as 10-year treasury rates gained about 3%, recouping losses from the previous day.

Meanwhile, big tech traded broadly higher, with Apple Inc and Microsoft Corporation both up, the latter boosted by a favourable note from Wedbush.

Treasury rates rose from the previous day as investors weighed aggressive comments from Federal Reserve officials, including chairman Jerome Powell, this week.

Federal Reserve Chairman Jerome Powell did not give any new hints on monetary policy, but he did signal the central bank's commitment, stating that difficult actions may be required to get inflation down.

"Restoring price stability when inflation is high may need steps that are unpopular in the near term as we raise interest rates to slow the economy," the chairman said in prepared remarks.

The statements matched those of other Fed officials, notably San Francisco Fed President Mary Daly and Atlanta Fed President Raphael Bostic, who have stressed that the Fed must keep rates higher for longer.

The Thursday inflation data is likely to reveal a slowing of pricing pressures.

"We forecast a 0.06% fall in headline CPI (vs. flat expectation), lowering the year-over-year rate to 6.43% (vs. 6.5% consensus and down from a peak of 9%)," Goldman Sachs wrote in a note.

Bed Bath & Beyond Inc announced a larger-than-expected fiscal third-quarter loss, but its shares rose 27%. According to CNBC, the home goods store is also said to have initiated its next wave of job losses as it struggles for its financial survival.

In other headlines, Amazon.com Inc announced the expansion of its prime purchase service, which enables merchants to provide prime privileges such as free shipping and returns on their own website. Its stock rose about 3%.

Finally, Crude oil prices rose for the second day in a row on Tuesday, as traders awaited U.S. oil inventory data and a much-anticipated government report on inflation due later this week.

Both the US and UK oil benchmarks sank more than 8% last week, the most since December 2nd, dragged down by China's coronavirus outbreak and worries of a worldwide recession. Since the weekend, Beijing has fully reopened its borders to international trade, removing the final traces of the harsh COVID laws that shaped much of its social programmes over the last three years.

(investing.com, cnbc.com, reuters.com)