U.S. stocks moved sharply higher Tuesday, with gains accelerating into the final hour of trading after a mostly uneventful pre-Thanksgiving session.

The S&P 500 (^GSPC) and technology-heavy Nasdaq Composite each climbed 1.4%, while the Dow Jones Industrial Average (^DJI) jumped nearly 400 points, or about 1.2%. The S&P 500 closed above 4,000 for the first time since September, while the Dow notched its highest close in three months.

Federal Reserve Bank of Cleveland President Loretta Mester said Tuesday that restoring price stability remains top priority for herself and other members of the Federal Open Market Committee (FOMC), which sets monetary policy.

"We’re committed to using our tools to put inflation on a sustainable downward trajectory to 2%," she said, in an event hosted by her bank.

Mester's comments come one day after Federal Reserve Bank of San Francisco President Mary Daly Monday said officials may lift the U.S. central bank's key policy rate above 5% if inflation does not ease. Daly also noted that writing off a 75-basis-point hike in December is "premature" and that "nothing is off the table."

In commodities markets, oil pared Monday’s losses after plunging to January lows on fears that fresh lockdowns in China and a reported output increase by Saudia Arabia and OPEC may weigh on demand. Energy minister Prince Abdulaziz bin Salman has since refuted the prospect of an increase in production, helping oil climb back from declines. West Texas Intermediate (WTI) crude futures rose to around $81 per barrel after hitting $75 per barrel on Monday.

On the corporate side, shares of Zoom Video Communications (ZM) dropped nearly 4% after the the video-conferencing platform trimmed its annual revenue outlook and projected further challenges posed by waning demand for online meetings.

Shares of Abercrombie & Fitch Co. (ANF) and American Eagle Outfitters, Inc. (AEO), meanwhile, gained around 21% and 18%, respectively after reporting upbeat earnings that lifted sentiment around the retail sector's outlook.

A steep climb in COVID cases across China has set off a wave of new restrictions for the world's largest economy just weeks after investors cheered the end of aggressive lockdowns in the country.

‘’The specter of COVID is still hovering over the Chinese economy, threatening to cause fresh snarl ups for supply chains and demand for goods,” Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said in a note Tuesday.

The S&P 500 has started the holiday-shortened Thanksgiving week lower compared to previous years. According to data from Bespoke Investment Group, the Monday of Thanksgiving week has historically seen the index trade slightly lower, with a decline of 0.01%. In years when the index has been down 10% year-to-date or more, like in 2022, performance has been more positive, with an average 0.37% gain.

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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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