US stocks finished sharply higher on Tuesday, as traders shook off a hotter-than-expected inflation report and dived back into tech shares.

The Dow Jones finished up 0.6 percent at 39,005, while the S&P 500 closed 1.1 percent higher at 5,175.

The Nasdaq shot up more than 1.5 percent to close at 16,265 – fuelled by companies including Nvidia and Meta, which rose by 7.1 percent and 3.3 percent respectively.

The cloud computing company Oracle, meanwhile, saw its share price jump by 11.8 percent after announcing that its recent earnings beat expectations.

February consumer inflation data published on Tuesday morning showed a small, but notable, acceleration from a month earlier.

"The market today breathes a sigh of relief that the threat of inflation is coming down," said Adam Sarhan from 50 Park Investments.

"Inflation has not gone away yet, but the trend has shifted from a rampant inflation, and now it's levelling out," he said.

The inflation print is likely to keep the Federal Reserve on hold as the central bank mulls the right time to start lowering its key lending rate from the current 23-year high of between 5.25-5.50 percent.

"Investors are no longer petrified about higher inflation," Sarhan said, adding: "they can look to other things like earnings to send stocks up." (AFP)