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NEW YORK: The Nasdaq led Wall Street’s main indexes higher on Tuesday as investors bought the dip in technology stocks, while briefly taking in their stride a more aggressive tone by the Federal Reserve to raise the cost of borrowing to tame inflation.

Bank shares, meanwhile, rose tracking a rise in the benchmark 10-year Treasury yield US10YT=RR to 2.36%. The S&P 500 banks index .SPXBK gained 2.6%, powered by a 4.6% rise in Wells Fargo WFC.N.

Rising interest rates could also help boost profitability of banks, which took a hit after the Fed cut the rates to record low in the wake of COVID-19 pandemic.

“Right now, the market is not concerned about higher rates. It is looking at the silver lining saying we need higher rates to tackle the inflation problem and is applauding the Fed’s hawkish stance which is shocking,” said Dennis Dick, proprietary trader at Bright Trading LLC in Las Vegas.

However, expectations of rapid interest rate hikes have also led to a flattening in the yield curve amid a selloff in U.S. Treasuries, stoking fears of slowing economic growth. US/

The odds of a 50-basis point rate hike in May rose to 72.2% after Chair Jerome Powell said the central bank must move “expeditiously” to keep an upward price spiral from getting entrenched. Read full story

Despite the hawkish Fed stance, eight of the 11 major S&P sectors were up with communication services .SPLRCL up 2.4% followed by financials .SPSY and information technology .SPLRCT shares.

“You’re seeing this mentality where money managers are concerned that the bottom is in. This market now is kind of just focused on getting capital put back in the market and dips are getting bought,” Dick said.

Megacap Apple Inc AAPL.O, Microsoft Corp MSFT.O, Amazon.com AMZN.O, Meta Platforms FB.O and Alphabet Inc GOOGL.O gained between 1.7% and 3.2% to provide the biggest boost to the S&P 500 and the Nasdaq.

A 12% jump in Alibaba Group Holding BABA.N also spurred a rally in Chinese tech stocks after the e-commerce giant raised its share buyback program to a record $25 billion. Read full story

Meanwhile, the Kremlin said it would like ongoing talks between Moscow and Kyiv to be more “active and substantive”, as fighting between Russian and Ukrainian forces continued. Read full storyRead full story

Rising uncertainty around the conflict and hawkish comments from Powell had led Wall Street’s main indexes to snap four sessions of gains on Monday.

At 11:46 a.m. ET, the Dow Jones Industrial Average.DJI was up 204.60 points, or 0.59%, at 34,757.59, the S&P 500.SPX was up 43.98 points, or 0.99%, at 4,505.16, and the Nasdaq Composite.IXIC was up 256.92 points, or 1.86%, at 14,095.38.

Tesla Inc TSLA.O added 2.4% as the electric-car maker delivered its first German-made cars to customers at its Gruenheide gigafactory. Read full story

Nike NKE.N shares advanced 4.6% as it beat quarterly profit and revenue expectations, and said manufacturing issues pinching sales over the past six months were now behind it. Read full story

Advancing issues outnumbered decliners by a 1.45-to-1 ratio on the NYSE and by a 2.47-to-1 ratio on the Nasdaq.

The S&P index recorded 35 new 52-week highs and no new lows, while the Nasdaq recorded 46 new highs and 28 new lows.

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