Australian shares ended higher on Tuesday in a broad-based rally, tracking a record Wall Street finish overnight, while investors awaited Federal Reserve Chair Jerome Powell’s testimony to gauge the outlook on interest rates.

The S&P/ASX 200 benchmark index closed 0.9% higher at 7,829.7 points, after falling 0.8% on Monday.

Market players will closely watch Powell’s testimony in Congress on Tuesday and Wednesday for hints of a dovish tone after signs of an easing labour market last week revived hopes of a September rate cut.

Central banks around the world, including the Reserve Bank of Australia, will be looking at the Fed’s move to chart their interest rate trajectory.

In Wall Street, S&P 500 and Nasdaq touched new record highs overnight.

Gains in the local bourse were led by financials, which rose 1.4% to close at a two-week high.

The country’s top lender Commonwealth Bank of Australia climbed 1.8% to a record high.

“I think banks remain popular for any funds that want exposure to Australian stocks but don’t wish to be exposed to the uneven Chinese economy or its property sector,” said Tony Sycamore, a market analyst at IG Australia.

Australian shares hit record high; RBA cautious on inflation

Miners gained 0.6%, tracking broader market sentiment despite falling iron ore prices. BHP and Rio Tinto added 0.6% each.

Tech stocks rose for the third straight day with a gain of 0.8%, amid a AI-driven rally in global chipmakers.

Nvidia rose almost 2% on Monday, while the world’s largest contract chipmaker Taiwan Semiconductor Manufacturing (TSMC) briefly touched a market cap of $1 trillion as its US stock reached a record high.

Buy now-pay later firm Zip ended 4.3% higher and tech major Megaport closed 1.6% higher.

Telecom firm Telstra closed up 2.2%, notching a three-month high, after it raised mobile phone pricing plans. Meanwhile, New Zealand’s benchmark S&P/NZX 50 index rose 0.9% to a three-week high.

The country’s central bank is widely expected to deliver a hawkish hold on Wednesday.