Wall Street stocks jumped on Tuesday, lifting major indices to fresh records, following comments from Federal Reserve Chair Jerome Powell that boosted the odds for interest rate cuts.

The S&P 500 gained 0.6 percent to 5,509, a fresh record.

The Nasdaq gained 0.8 percent to 18,028, also a record, while the Dow Jones advanced 0.4 percent to 39,331.

Powell's upbeat comments came at a panel discussion with other central bankers in Portugal.

"We've made quite a bit of progress in bringing inflation back down to our target, while the labour market has remained strong and growth has continued," Powell said. "We want that process to continue."

Powell "said just enough to get the traders excited as he always does," said Steve Sosnick at Interactive Brokers. "Powell most always tends toward the dovish side or typically says something neutral, but traders take the part that they like to hear."

Among individual companies, Tesla shot up more than 10 percent after reporting lower auto sales in the second quarter that still topped expectations.

The figures fuelled talk that Elon Musk's automaker is poised to rebound after a tough period for electric vehicles.

Markets will close early on Wednesday for the Independence Day holiday before reopening on Friday, when the market will digest US jobs data for June. (AFP)