Stocks climbed after Federal Reserve Chair Jerome Powell reiterated his views that inflation pressures will be transitory even after a notable increase in recent months. The dollar fell.

In a testimony to the House Select Subcommittee Tuesday, Powell said he’s got "a level of confidence" that prices will eventually come down, while noting that it would be "very, very unlikely" to see the kind of 1970s-style inflation. He also said that a 5 per cent inflation environment wouldn’t be acceptable, and urged patience at evaluating data on prices.

"So inflation is larger than they expected," said Art Hogan, chief strategist at National Securities. "That part is true. But the part about that’s going to force their hand faster than we think is the part that he’s pushing back on. So I think markets have calmed down about that."

Most major groups in the S&P 500 advanced, with retailers and technology companies leading gains. GameStop Corp. climbed as the video-game retailer raised US$1.1 billion in share sales. Bitcoin fluctuated after earlier tumbling below US$30,000 for the first time since January.

Earlier Tuesday, New York Fed President John Williams noted that a discussion about raising interest rates is still "way off in the future." Meantime, his Cleveland counterpart Loretta Mester said very low rates for a long period of time and unconventional policy tools such as asset purchases can lead to too much risk-taking and financial-stability issues.

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Here are some events to watch this week:

• U.S. new home sales, current account balance on Wednesday
• EIA crude oil inventory report due Wednesday
• Bank of England interest rate decision Thursday
• The Fed releases Thursday the results of stress tests on the largest U.S. banks

These are some of the main moves in financial markets:

Stocks

• The S&P 500 rose 0.5 per cent as of 4 p.m. New York time
• The Nasdaq 100 rose 0.9 per cent
• The Dow Jones Industrial Average rose 0.2 per cent
• The MSCI World index rose 0.6 per cent

Currencies

• The Bloomberg Dollar Spot Index fell 0.1 per cent
• The euro rose 0.2 per cent to US$1.1939
• The British pound rose 0.1 per cent to US$1.3949
• The Japanese yen fell 0.4 per cent to 110.66 per dollar

Bonds

• The yield on 10-year Treasuries declined two basis points to 1.47 per cent
• Germany’s 10-year yield was little changed at -0.16 per cent
• Britain’s 10-year yield advanced one basis point to 0.78 per cent

Commodities

• West Texas Intermediate crude fell 0.8 per cent to US$73.06 a barrel
• Gold futures fell 0.4 per cent to US$1,775.50 an ounce

--With assistance from Andreea Papuc, Namitha Jagadeesh and Claire Ballentine.