Stocks rose on Tuesday as investors looked ahead towards another key inflation report this week. The Dow Jones Industrial Average rose more than 125 points, while the S&P 500 Index and Nasdaq Composite advanced about 0.5% and 0.75%, respectively.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): +0.48% or +25.26 points to 5,246.68

Dow Jones Industrial Average (DIA  ): +0.32% or +126.60 points to 39,558.11

Nasdaq Composite Index (QQQ  ): +0.75% or +122.94 points to 16,511.18

Moving Markets:

Wholesale prices increased at a more-than-expected rate in April, with the producer price index rising 0.5% month-to-month and 2.2% annually. However, March's reading was revised to show a decline of 0.1% from its previous rate of a gain of 0.2%.

On a core basis, which excludes food and energy prices, the index rose 0.5% on the month, and increased 0.4% when excluding trade services as well. On an annual basis, core PPI rose 2.4% for its biggest annual rise since August 2023.

Federal Reserve Chair Jerome Powell said at the annual general meeting of the Foreign Bankers' Association in Amsterdam on Tuesday that inflation is waning at a slower-than-expected rate, which signals that the central bank needs to maintain rates at their current level for an extended period.

"We did not expect this to be a smooth road. But these [inflation readings] were higher than I think anybody expected," Powell said. "What that has told us is that we'll need to be patient and let restrictive policy do its work."

"I don't think that it's likely, based on the data that we have, that the next move that we make would be a rate hike," Powell added. "I think it's more likely that we'll be at a place where we hold the policy rate where it is."

In the News:

Google (GOOGL  ) (GOOG  ) at its annual developer conference, Google I/O, announced its newest addition to its Gemini artificial intelligence products, Gemini 1.5 Flash. The company said the new large language model can quickly summarize conversations, caption images and videos and pinpoint data from documents and tables.

On the Earnings Front:

Home Depot (HD  ) on Tuesday reported weaker-than-expected fiscal first-quarter earnings, as its comparable sales fell 2.8% overall and 3.2% in the United States. Moreover, consumers also made fewer visits to Home Depot's stores and websites, with transactions declined 1% to 386.8 million and the average ticket fell by 1.3% to $90.68.

"The home improvement customer is extremely healthy from a financial perspective," said CFO Richard McPhail in an interview with CNBC. "And do it's not the case of not having the ability to spend. What they tell us is they're just simply deferring these projects as given higher rates, it just doesn't seem the right moment to execute."

For Wednesday:

All eyes will be on April's consumer price index reading due out Wednesday morning, as well as other monthly economic reports on retail sales and home builder confidence.