U.S. stocks closed sharply higher Tuesday in a wild day for traders after Federal Reserve Jerome Powell warned that the central bank may need to keep raising interest rates to keep inflation heading lower. The Dow Jones Industrial Average rose about 265 points, or 0.8%, ending near 34,156, after sinking as low as 33,634.10 earlier in the session. That ended three sessions in a row of declines, according to Dow Jones Market Data. The S&P 500 index gained 1.3%, while the Nasdaq Composite Index [s:comp] closed up 1.9%. All three major stock indexes swung from gains to losses to sharp gains as of the closing bell, after Fed Chair Powell said he expects significant declines in U.S. inflation this year, but also that more rate hikes may be needed to keep costs of living coming down. He also reiterated that central bankers expect to hold policy at a restrictive level for some time. In bonds, the policy-sensitive 2-year Treasury yield rose to 4.469%, the highest since Nov. 29 based on 3 p.m. Eastern levels.
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