(Updates with preliminary closing prices at 4 p.m. ET/2000 GMT)

By Sinéad Carew and Bansari Mayur Kamdar

May 14 (Reuters) - Wall Street's main indexes all

advanced and the Nasdaq scored a record closing high as Federal

Reserve Chair Jerome Powell reassured investors while they

digested Tuesday's data and waited for Wednesday's crucial

consumer inflation report.

U.S. producer prices increased more than expected in April

as the cost of services and goods rose sharply, leading traders

to pare back bets of a first rate cut in September.

But Powell on Tuesday described the producer price index

report as more mixed than hot given that prior-period data was

revised lower.

Investors also found reassurance in Powell's comment that he

did not expect the central bank's next interest rate move to be

a hike, despite the recent run of higher-than-expected

inflation.

"The market is getting more comfortable with

higher-for-longer rates. The real question has been lately if a

hike is a possibility and Powell's reiterating that it's not on

the table right now," said Lindsey Bell, chief strategist, 248

ventures, Charlotte, North Carolina. Bell also noted that stocks

appeared to gain ground during the session as Treasury yields

declined.

"It seems that the bond market is digesting all this and the

stock market is reacting to the bond market."

Investors awaited Wednesday's Consumer Price Index figures

to assess whether upside surprises in the first quarter extended

into April.

Sticky inflation and persistent labor market strength have

prompted financial markets and most economists to push back

expectations for an initial Fed interest rate cut to September,

from March seen at the start of the year.

Still, stocks have rallied so far this year, with all three

major U.S. indexes hovering near fresh record highs thanks to

better-than-expected earnings for the first quarter.

According to preliminary data, the S&P 500

gained 24.21 points, or 0.46%, to end at 5,245.63 points,

while the Nasdaq Composite gained 121.11 points, or

0.74%, to 16,509.34. The Dow Jones Industrial Average

rose 119.96 points, or 0.30%, to 39,551.47.

Also supporting the indexes on Tuesday was an advance in

shares market heavyweight Alphabet after the Google

parent showed how it is using artificial intelligence (AI)

across its businesses, including a beefed-up Gemini chatbot and

improvements to its prized search engine.

Shares in Home Depot ( HD ) pared losses after falling more

than 2% on news that the retailer's quarterly same-store sales

fell more than expected as Americans focused on small-scale home

projects, spending less on big-ticket items.

U.S.-listed shares of Alibaba ( BABA ) declined after it

reported an 86% drop in fourth-quarter profit.

On Holding rallied as the footwear maker raised its

annual sales forecast after beating quarterly sales

expectations, citing strong demand for its running shoes.

U.S. President Joe Biden unveiled a bundle of steep tariff

increases on an array of Chinese imports including electric

vehicles, computer chips and medical products.

U.S.-listed shares of Chinese EV maker Li Auto ( LI ) fell

while Tesla gained ground.

GameStop ( GME ) shares extended their recent rally after

flag bearer Roaring Kitty posted on X.com for the first time in

three years.

Other 2021 meme rally participants and highly shorted stocks

AMC Entertainment ( AMC ) and Koss Corp ( KOSS ) also advanced.