The U.S. stock market closed higher on Tuesday, with the S&P 500, Nasdaq Composite, and Dow Jones all posting gains. The S&P 500 rose 28.25 points (+0.38%), the Nasdaq Composite gained 233.83 points (+0.90%), and the Dow Jones added 9.63 points (+0.02%). The broad-based rally was driven by a bounce in chip stocks and light inflation data, which eased concerns about the Federal Reserve's rate-hike bets. The CPI data showed a slight cooling of inflation to 3.5%, equaling 2020 lows, which supported growth stocks. However, the market's tone remained cautious, with IBM shares plunging 24% amid concerns about its earnings and strategic direction.

The overall tone of the session was risk-on, with investors favoring growth stocks and technology sectors. The better-than-expected CPI data and the Fed's dovish stance provided a supportive backdrop for the market. However, the selloff in IBM shares highlighted the volatility in the market, with investors reacting to specific company news. The chip sector's rally was a notable theme, with Tower Semiconductor and other chip-related stocks benefiting from the positive sentiment. Additionally, the market's performance was influenced by geopolitical developments, with concerns about the Iran ceasefire and potential sanctions weighing on investor sentiment. Despite the mixed signals, the market's broad-based rally suggested a positive outlook for the near term.