U.S. equities rose on Tuesday as investors digested strong consumer confidence data, with financials leading.
Consumer confidence surged this month, hitting 125.6, up from 116.1 in February, the Consumer Board Consumer Confidence Index showed.
"This is a market that's saying: 'I will think of bad news tomorrow,'" said Kim Forrest, senior equity analyst at Fort Pitt Capital. "The U.S. economy is 70 percent consumer-based, so these numbers are important." She also said that strong quarterly results from Darden Restaurants are helping lift the market's view on the consumer.
The Dow Jones industrial average gained 150 points, with Goldman Sachs contributing the most gains. The 30-stock index also snapped an eight-day losing streak.
"That really highlights what's been underpinning the market," said Jim Davis, regional investment manager for The Private Client Group of U.S. Bank. "I also think you're seeing some bottom, fishing."
The S&P 500 rose 0.7 percent, with financials, materials, industrials and energy all rising 1 percent. The Nasdaq composite climbed 0.6 percent, with Apple climbing to a fresh all-time high.
Other data released Tuesday included the S&P CoreLogic Case-Shiller home price index, which showed U.S. home prices rose 5.9 percent to a 31-month high in January.
"The more we see the hard data gaining momentum in conjunction with the soft data shows the economy may not stall out in the second quarter," said Quincy Krosby, market strategist at Prudential Financial.
Investors also kept an eye on Washington. Optimism about some of President Donald Trump's key proposal's coming to fruition — particularly tax reform, deregulation and government spending — has diminished since the administration was dealt a blow on Friday, when a bill aimed at replacing Obamacare was pulled.
The bill's defeat left investors jittery about whether Trump's pro-growth policies would be able to move forward, sending the three major indexes lower by nearly 1 percent early Monday. The indexes, however, rebounded throughout the day and closed well off session lows.
"Like it or not (and we get email in both directions every day), US President Donald Trump represents the latest iteration of the Hero's Journey when it comes to determining asset prices," said Nicholas Colas, chief market strategist at Convergex, in a note. "We have essentially traded the typical Fed-Hero of the last few decades for the current President's economic agenda."
"That is why equity markets were so forgiving [Monday] over Friday's failure to bring the American Health Care Act to a vote in the House – simply put, heroes don't win every battle," he said.
Stocks have rallied significantly since the U.S. election on hopes Trump's proposed policies would become reality. Since Nov. 8, the Dow and Nasdaq have risen more than 12 percent, while the S&P has climbed more than 9 percent.
Investors on Tuesday also digested commentary from key Federal Reserve officials, including Vice Chairman Stanley Fischer. In an interview with CNBC, Fischer said two more rate hikes seem about right.
The U.S. central bank raised rates earlier this month by 25 basis points but kept its rates forecast largely unchanged.
Cleveland Fed President Loretta Mester is scheduled to speak after the close. Fed Chair Janet Yellen spoke Tuesday but did not address monetary policy.
"Given how markets have responded to the dovish hike this month, it will be interesting to see whether policymakers remain along these lines or start talking up the prospect for another hike in June," said Craig Erlam, senior market analyst at Oanda.
U.S. Treasurys traded lower, with the benchmark 10-year note yield near 2.4171 percent and the short-term two-year note yield around 1.2975 percent.
The Dow Jones industrial average rose 150.52 points, or 0.73 percent, to close at 20,701.50, with Apple leading advancers and Johnson & Johnson the top decliner.
The gained 16.98 points, or 0.73 percent, to end at 2,358.57, with financials leading all 11 sectors higher.
The Nasdaq advanced 34.77 points, or 0.60 percent, to close at 5,875.14.
About three stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 823.95 million and a composite volume of 3.332 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.5.
On tap this week:
4:30 p.m. Federal Reserve Governor Jay Powell
9:20 a.m. Chicago Fed's Evans
10:00 a.m. Pending home sales
11:30 a.m. Boston Fed President Eric Rosengren
1:15 p.m. San Francisco Fed President John Williams
8:30 a.m. Jobless
8:30 a.m. Q4 Real GDP
9:45 a.m. Cleveland Fed President Loretta Mester
11:00 a.m. Dallas Fed's Kaplan
11:15 a.m. San Francisco Fed's Williams
4:30 p.m. New York Fed President William Dudley
8:30 a.m. Personal income
8:30 a.m. Consumer spending
8:30 a.m. Core PCE prices
9:45 a.m. Chicago PMI
10:00 a.m. Consumer sentiment
10:00 a.m. Minneapolis Fed President Neel Kashkari
10:30 a.m. St. Louis Fed President James Bullard