STOCKS on Wall Street closed higher, with both the S&P 500 and the Nasdaq finishing at new records amid a midweek bounce fueled by tech stocks including Nvidia.

Remarks by Federal Reserve chair Jerome Powell in Washington spurred hopes of a start to interest rate cuts, as he signaled the economy was on the right track.

The Fed “can and will” begin cutting its key lending rate over the course of this year “if the economy evolves over that path,” Powell told lawmakers on Capitol Hill during his second day of hearings on US monetary policy.

“The market really took Powell’s comments positively,” Jack Ablin from Cresset Capital told AFP.

“I think the Fed is ready to start cutting -- probably mid year,” he added.

On Wall Street, the broad-based S&P 500 closed up 1.0 per cent to hit a new record of 5,157.36, while the tech-heavy Nasdaq soared by 1.5 per cent to a fresh high of 16,273.38.

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The Dow Jones Industrial Average closed 0.3 per cent higher at 38,791.35.

Among individual companies, Nvidia’s share price popped 4.5 per cent, and Intel rose by 3.7 per cent.

Traders are preparing for fresh US jobs data on Friday morning, which will give an indication of how the US labour market is holding up in the face of high interest rates.

The markets are expecting February job gains to be more modest for February than they were in January, when the US added more than 350,000 new jobs. AFP