Chair Jerome Powell on Tuesday underscored the Federal Reserve's determination to keep raising interest rates until it has brought inflation under control a high-stakes effort that carries the risk of causing an eventual recession.

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"What we need to see is inflation coming down in a clear and convincing way," Powell said in remarks to a Wall Street Journal conference.

Strong industrial production numbers and retail sales data were followed by hawkish Fed speak but the market continued to move higher.

Stocks rose steadily throughout the day and ended with broad gains as traders got back to buying after a mostly miserable few weeks on Wall Street.

The S&P 500, the Dow Jones Industrial Average and the tech-heavy Nasdaq gained ground. Small-company stocks rose more than the rest of the market, a signal investors are feeling bullish on the economy. Treasury yields also rose.

After hitting seven-week highs, oil prices slumped 2 percent as the United States could ease some restrictions on Venezuela's government, raising hopes that the market could see some additional supplies. Prices also fell after Fed Chairman Powell warned the economy could be hurt by attempts to reduce inflation.

The dollar fell for a third straight day on Tuesday, pulling back from a two-decade high against a basket of major peers.

Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details

-With PTI inputs

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First Published:May 18, 2022 8:30 AM IST