Trading on Tuesday got off to a shaky start as Federal Reserve Chair Jerome Powell stressed at his Senate confirmation hearing he is prepared to raise interest rates to contain inflation but said the timing of any hikes will depend on economic conditions, states Jon Markman, tech sector expert, and editor of Strategic Advantage.

But expectations were for a more dire forecast, so optimism germinated quickly and when the pixel dust settled, the Nasdaq jumped 1.4% to 15,153.45 and the Dow was higher by 0.5% at 36,252.02.

Breadth favored advancers 3-1, and there were 186 new highs vs. 212 new lows, still an oversold condition. Big caps on the new high list included Exxon (XOM), Chevron (CVX), Wells Fargo (WFC), Morgan Stanley (MS), and Charles Schwab (SCHW).

The energy and technology sectors fared best with only consumer staples, real estate, and utilities posting losses.

The 10-year US Treasury yield slipped four basis points to 1.74%, staying near two-year highs. West Texas Intermediate crude oil surged 4.2% to $81.49 a barrel.

Investors are now focusing on the US December inflation data, set to be released today, with the report showing consumer prices up 7% year-over-year, a 40-year high.

The National Federation of Independent Business monthly sentiment index rose to 98.9 in December from 98.4 in November, reflecting gains in three of the 10 components while three others declined. The NFIB previously reported on Jan. 6 that 49% of small-business owners said that they had job vacancies that could not be filled in December, while 48% cited the need to raise wages to hire workers, a 48-year high.

Meanwhile, Redbook reported US same-store retail sales were up 14.4% year-over-year in the week ended Jan. 8, slower than the 18.8% gain in the prior week.

In company news, Illumina's (ILMN) revenue forecasts for the fourth quarter and full-year 2021 were above market estimates, and its guidance for 2022 also beat expectations. Shares of the genetic sequencing technology supplier rose 17% to lead the S&P 500.

Las Vegas Sands (LVS) shares jumped nearly 7% after JPMorgan upgraded the casino operator to overweight from neutral, raising its share price target to $48 from $36. Investor apathy toward Macau's depressed gaming sector has reached historic levels, JPMorgan analysts said in the research note.

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