The Dow and the S&P 500 turned positive on Tuesday after Federal Reserve Chair Jerome Powell said the central bank may soon end its balance sheet runoff, easing investor concerns over tight financial conditions.

US stocks jumped Monday in a broad rebound, bouncing back from Friday's rout after President Trump played down the escalating US trade standoff with China and said it "will all be fine!" Stocks recouped some of Friday's hefty losses after Trump dialed back his Friday threat to impose an additional 100% tariff on Chinese goods from Nov.

At the close, the blue chip Dow Jones Industrial Average was up 1.3% at 46,067, the broader S&P 500 had gained 1.6% to 6,654, and the tech-heavy Nasdaq Composite was 2.2% higher at 22,694.

A slew of major lenders reported solid results on strong performance in the investment banking segment, helping the S&P 500 banking index rise 1.6 percent. Wells Fargo advanced 7.6 percent and was on track for its best day in six months and Citigroup added 4.3 percent after both lenders beat estimates for third-quarter profit.

A fire at Dow's Freeport, Texas, site has shut down three polyethylene production lines — including a newly launched unit — prompting ongoing assessments and raising concerns over supply impacts.

The fire triggered over two tons of estimated chemical pollution. Emissions calculated by the company based on its process data included 1,553 pounds of ethylene, 1,140 pounds of octene, 892 pounds of 2-hexene, 434 pounds of carbon monoxide, 378 pounds of octane and 217 pounds of nitrogen oxide.