S&P 500 closes higher in late U-turn

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Wall Street reversed its losses late Tuesday, with the S&P 500 and the Dow reclaiming positive territory by the close in a tug-of-war between stocks that thrived amid lockdowns and those that stand to benefit most from a reopening economy.

The Nasdaq was the only major US stock index to lose ground on the day.

Market-leading growth stocks, which thrived amid pandemic-related lockdowns, weighed on stocks for much of the day as investors favoured shares that stand to gain most as ongoing vaccine deployment allows economic restrictions to be lifted.

"People are buying the dip, a move that's been rewarded for months in a one-sided market," said Dennis Dick, head of market structure and a proprietary trader at Bright Trading LLC.

"It's tough to be a bear, it's really tough. The only fear out there is the fear of missing out," Dick said.

Fed Chairman Jerome Powell pushed back against concerns that the central bank's economic support increased the risk of spiraling inflation, and insisted that the central bank's accommodative monetary policy would remain in place for "some time."

Testifying before the Senate Banking Committee, Powell said the economic recovery was "uneven and far from complete," adding that investors are mostly responding to an anticipated rebound as vaccine deployment curbs the pandemic.

"Powell's primary objective appears to clearly be to support economic growth, even at the potential expense of higher inflation," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

Unofficially, the Dow Jones Industrial Average rose 13.75 points, or 0.04 per cent, to 31,535.44, the S&P 500 gained 4.85 points, or 0.13 per cent, to 3,881.35 and the Nasdaq Composite dropped 67.85 points, or 0.5 per cent, to 13,465.20.

Tesla Inc dropped due to falling bitcoin . The electric car maker recently invested $US1.5 billion ($A1.9 billion) in the cryptocurrency.

Cryptocurrency miners Riot Blockchain Inc and Marathon Patent Group Inc plunged, as did bitcoin bank Silvergate Capital Corp.

Home improvement retailer Home Depot Inc posted better-than-expected quarterly earnings. But it cast doubt on whether spiking sales, driven by homebound consumers taking on do-it-yourself projects amid COVID lockdowns, are sustainable going forward. The stock fell, and was among the heaviest drags on the Dow.

Smaller rival Lowe's Companies Inc, expected to report its results early Wednesday, also lost ground.