The S&P 500 and Nasdaq Composite rose marginally on Tuesday — eking out fresh record closing highs — as investors digested testimony from the top U.S. central banking official and assessed the potential economic impact of the coronavirus.
The broad index closed 0.2% higher at 3,357.75. The Nasdaq was up 0.1% at 9,638.94. The Dow Jones Industrial Average rose as much as 138 points before closing flat at 29,276.34. The three major averages hit intraday records earlier in the day.
Federal Reserve Chairman Jerome Powell testified in front of the House Financial Services Committee that the central bank is "closely monitoring" the coronavirus situation for a potential hit to China and the global economy. During the Q&A portion of his testimony, Powell noted it is "too early to say" how the coronavirus will ultimately impact the U.S. economy.
"The coronavirus clearly presents a risk to the global economy," said Danielle DiMartino Booth, CEO of Quill Intelligence. "The Chinese economy is four times greater than it was during the SARS outbreak and China has established itself as the most critical link in the global supply chain."
Investors have been grappling with fears that of the coronavirus denting global economic growth.
China's National Health Commission on Monday night said the death toll had risen to 1,016 people with 42,638 confirmed cases. However, data from Johns Hopkins University showed the number of new confirmed cases was its lowest since late January, increasing optimism around the country's efforts to contain the outbreak.
Fears over the economic fallout from the outbreak have also been offset by positive economic indicators. Jobs data released last week easily beat analyst expectations while U.S. manufacturing and services activity show signs of improvement.
Both the S&P 500 and Nasdaq Composite closed at fresh highs on Monday, while the Dow jumped more than 170 points.
Bridgewater Associates founder and billionaire investor Ray Dalio said the virus' impact on global markets may have been exaggerated.
"Because of the temporary nature of that, I would expect more of a rebound," Dalio said at a conference in Abu Dhabi. "It most likely will be something that in another year or two will be well beyond what everyone will be talking about."
However, companies such as Under Armour have noted they will take a hit from the outbreak. Under Armour warned Tuesday the outbreak could lower sales by $50 million to $60 million.
"While the stock market assumes no impact from the virus as we continue to chug higher, expect much more of this kind of talk as companies figure out the full effect," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. "For many companies, these sales will not be made up."
Under Armour shares dropped more than 18% as lackluster quarterly results also pressured the apparel maker.
In other corporate news, a judge approved a merger between T-Mobile and Sprint. Sprint shares soared more than 70% while T-Mobile advanced 10.8%.
On the data front, job openings fell to a two-year low in December, reaching 6.4 million. The Bureau of Labor Statistics said the biggest decreases in job openings came from transportation, utilities and educational services, among other sectors.
—CNBC's Elliot Smith contributed to this report.