NEW YORK — U.S. stocks closed higher on Tuesday, driven by a strong performance in the technology sector, as investors awaited key inflation data and the onset of the earnings season.

According to Namibia Press Agency, the Nasdaq Composite led the gains, marking its best performance in nearly three weeks with an increase of 259.01 points, or 1.45 percent, to 18,182.92. The S&P 500 rose by 55.19 points, or 0.97 percent, to 5,751.13, while the Dow Jones Industrial Average gained 126.13 points, or 0.30 percent, to 42,080.37. The technology and communication services sectors were the standout performers, climbing 2.12 percent and 1.07 percent respectively.

Investor sentiment has been bolstered by a growing belief that the Federal Reserve is effectively managing inflation without precipitating a recession. "What we're cautioning investors is not to read too much into each data point," said Todd Walsh, CEO and chief technical analyst at Alpha Cubed Investments. "The Fed seems to be on track from what we're looking at."

However, concerns persist over the economic impact of the ongoing hurricane season. Atlanta Fed President Raphael Bostic highlighted the potential for extended disruption, noting the damage from Hurricane Helene and expressing concerns over the impending Hurricane Milton.

The decline in U.S. Treasury yields has also benefitted tech stocks, though interest rate policy continues to dominate market dynamics. Traders and investors are now poised for the upcoming earnings reports from major firms like JPMorgan Chase, Wells Fargo, and BlackRock, starting Friday. Additionally, they are keenly awaiting Thursday’s release of consumer inflation data, which could influence Federal Reserve policy decisions moving forward.