Wall Street stocks rallied for a second straight session on Tuesday amid hopes of a US monetary policy pivot, as Twitter surged on the revived chance of Elon Musk's takeover.

The Nasdaq led the major indices, powering up 3.3 percent to close at 11,176.

The Dow Jones rose 2.8 percent to 30,316, while the S&P 500 jumped 3.1 percent to 3,790.

After a bruising September ended another losing quarter for Wall Street, equities have soared the last two days as analysts point to hopes of moderating monetary policy.

The Reserve Bank of Australia (RBA) raised its policy interest rate less than expected, a 0.25 percentage point hike which was half of what had been forecast, and said that while more increases will be needed to tame inflation it wanted to pause to assess the impact of rapid moves implemented this year.

The yield on the 10-year US Treasury, a proxy for interest rates expectations, retreated further as investors bet that weakening economic data will prompt a similar pullback from the US Federal Reserve.

"Wall Street sees light at the end of the Fed rate hiking tunnel and the scramble to pick up stocks is on," said Oanda's Edward Moya.

Among individual companies, Twitter rocketed 22.3 percent higher as Musk revived his buyout offer of the social media company at the original per-share price of US$54.20 in a transaction that could avert a bitter court case.

Twitter confirmed receipt of Musk's latest correspondence, and said "the intention of the company is to close the transaction at US$54.20 per share."

Micron Technology jumped 4.3 percent after announcing a US$100 billion investment in a new semiconductor plant in New York in a move that was applauded by New York politicians and President Joe Biden following legislation to fund new chip plants. (AFP)