04:35 PM EDT, 10/08/2024 (MT Newswires) -- US benchmark equity indexes closed higher Tuesday as traders evaluated remarks by a Federal Reserve governor and awaited official inflation data for September due later in the week.

The Nasdaq Composite rose 1.5% to 18,182.9, while the S&P 500 gained 1% to 5,751.1. The Dow Jones Industrial Average advanced 0.3% to 42,080.4. Technology led the gainers among sectors. Only energy and materials closed lower.

Fed Governor Adriana Kugler said she would support additional cuts in the central bank's benchmark lending rate if progress on inflation continues as projected.

"Still, my approach to any policy decision will continue to be data-dependent and to rely on multiple and diverse sources of data to form my view of how the economy is evolving," Kugler said.

Last month, the Federal Open Market Committee reduced interest rates by 50 basis points.

The US two-year yield fell four basis points to 3.96% Tuesday, while the 10-year rate eased by less than one basis point to 4.02%.

Government data are likely to show Thursday that US consumer inflation rose 0.1% sequentially and 2.3% annually last month, according to a Bloomberg-compiled consensus.

"Our expectations are for declines in energy prices to keep the (sequential) gains in headline (consumer price index) more muted than those for core," Deutsche Bank said in a note. "Should our expectations hit the mark, the year-over-year growth rate of headline CPI would drop (30 basis points) to 2.3%, while that for core would tick down a tenth to 3.2%."

The US producer prices report for September is scheduled to be released Friday.

Small business optimism in the US improved less than expected last month as inflation continued to pose concerns among business owners, the National Federation of Independent Business' latest survey showed.

The US trade deficit narrowed in August as exports grew while imports decreased, government data showed.

"The resolution of the dockworkers strike earlier this month ensures supply chain disruptions would be minimal and removes a key risk to trade outlook," Oxford Economics said.

West Texas Intermediate crude oil dropped 4.2% to $73.90 a barrel. "A rally in oil prices paused as traders awaited for a response from Israel to last week's Iranian rocket attacks," D.A. Davidson said in a note to clients.

In company news, Palo Alto Networks ( PANW ) shares rose 5.1%, the top performer on the Nasdaq and among the best on the S&P 500, as Goldman Sachs increased its price target on the stock to $425 from $376 and maintained its buy rating.

PepsiCo ( PEP ) tempered its full-year organic revenue growth outlook as the beverage and snacks company's third-quarter earnings beat Wall Street estimates, while sales fell short of market expectations. The company's shares closed 1.9% higher.

Super Micro Computer ( SMCI ) saw one of the steepest declines on the Nasdaq and the S&P 500, down 5%.

Gold fell 0.9% to $2,641.20 per troy ounce, while silver declined 3.4% to $30.90 per ounce.