The S&P 500 and Nasdaq both gained more than 1% on Tuesday triggered by Federal Reserve Chair Jerome Powell’s remarks that were deemed to be less aggressive than anticipated.

In a Q&A session at the Economic Club of Washington, Powell stated that he anticipates "substantial decreases in inflation" to occur in 2023.

Since markets are now pricing in a peak rate above 5% as a result of the Fed's 25 basis point increase in interest rates last week, which came in response to data released on Friday showing the U.S. economy added employment at a strong clip in January.

The S&P 500 edged up 48.93 points, or 1.19%, at 4,160.01, while the Nasdaq Composite advanced 207.82 points, or 1.75%, at 12,095.27. The Dow Jones Industrial Average added 253.68 points, or 0.75%, at 34,144.70.