It was the fourth session in five that the technology-heavy Nasdaq index has posted a record close, and the eighth time since June 27.
Artificial-intelligence chip leader Nvidia (NVDA.O) was the primary factor behind the Nasdaq's increase, gaining 4% after it unveiled plans to resume sales of its H20 AI chip to China.
The news buoyed other chipmakers, with Advanced Micro Devices (AMD.O) and Super Micro Computer (SMCI.O) both gaining more than 6.4%.
The semiconductor index (.SOX) also advanced 1.3% to its highest point in a year, while the S&P technology index (.SPLRCT) climbed by the same percentage to hit a record high.
Rob Swanke, senior investment research analyst at Commonwealth Financial Network, said the Nvidia news meant that some investors, who had moved into other stocks due to technology's high valuations, were rotating back.
"I would probably say it's a one-day pop," he added, noting that investors would be waiting for sales to be reflected in its earnings.
The Nasdaq Composite (.IXIC) gained 37.47 points, or 0.18%, to finish at 20,677.80. The Dow Jones Industrial Average (.DJI) fell 436.36 points, or 0.98%, to 44,023.29, and the S&P 500 (.SPX) lost 24.80 points, or 0.40%, to 6,243.76.
Markets have been buoyant in recent weeks. Investor concerns that the U.S. economy would be tarnished by President Donald Trump's policies, including major tariff announcements, have started to abate, allowing Wall Street to move higher.
This week was expected to be a significant test of that improving sentiment, with the start of second-quarter earnings season and inflation reports that were forecast to reflect sellers starting to pass on higher tariff-related costs.
The first of these reports showed U.S. consumer prices posted their biggest jump in five months in June, hinting that tariffs may be starting to heat up inflation. Still, underlying inflation stayed moderate, offering some reassurance despite the headline spike.
"The picture from inflation this morning, coming in a little bit higher than expected but pretty much in line, gives you some sense that the tariffs are starting to flow through into the economy," said Commonwealth's Swanke.
"We'll get more concrete news, as we go through earnings, to see how companies are delivering the impact of higher tariffs."
On the first day of second-quarter earnings season, banking stocks whipsawed in volatile trade.
JPMorgan Chase (JPM.N) slipped 0.7% despite raising its 2025 net interest income outlook, while Wells Fargo (WFC.N) fell 5.5% even as its profit rose on reduced loan-loss reserves. BlackRock (BLK.N) notched a new milestone for assets under management, yet its shares slid 5.9%.
Bucking the trend, Citigroup (C.N) climbed 3.7% to its highest finish since the global financial crisis, after its traders delivered a windfall that boosted second-quarter profit.
The number of shares changing hands on U.S. exchanges on Tuesday was 16.82 billion, compared with the 17.55 billion average for the last 20 trading days.
