Australian shares have ended Tuesday higher, after Wall Street reacted to news that the US central bank will continue to be led by Jerome Powell.

The ASX 200 traded increasingly higher as the day progressed, ending up 0.8 per cent, at 7,411 points.

Top performers included Fortescue Metals, with a gain of almost 10 per cent.

Other commodity stocks — including BHP, Champion Iron, Rio Tinto and Whitehaven Coal — all made gains of up to 8 per cent.

That was despite a CBA briefing note which said the bank expected prices for Australia's four key commodity exports to fall.

"The first half of 2021 saw non-rural commodities rise strongly with the prices of Australia's four main commodity exports, iron ore, thermal coal, coking coal and LNG, all lifting," CBA noted.

"The second half of 2021 has seen some divergent trends with iron ore falling but coal and LNG rising sharply.  

Meanwhile, Bapcor ended the day down almost 10 per cent.

Local tech stocks WiseTech Global, Megaport and Afterpay were down several per cent, following steep losses for US tech firms overnight.

Jerome Powell set for another four years

In the United States, the S&P500 briefly hit a new high on news of the Federal Reserve's chair Jerome Powell being nominated by President Joe Biden for another four-year term.

However, it gave up those gains to close 0.3 per cent lower, while the Dow Jones Industrial Average finished fairly flat, up just 0.1 per cent.

Lael Brainard, the Federal Reserve board member who was the other top candidate for the job, will be vice-chair, the White House said.

“While there’s still more to be done, we’ve made remarkable progress over the last 10 months in getting Americans back to work and getting our economy moving again," Mr Biden said in comments emailed to reporters.

Mr Powell will need to be confirmed by the Senate, which is currently controlled by Mr Biden's Democratic Party but with a narrow majority.

The news had investors rallying at the prospect of an earlier-than-expected US interest rate hike in 2022.

The Federal Reserve had been sticking to a longer timeline, but concerns about rising inflation and a better-than-expected post-COVID recovery have seen sentiment from the central bank towards withdrawing stimulus harden.

The payback on two-year Treasury yields hit a high, too. 

Bets on earlier rate rises saw the tech-heavy Nasdaq end 1.3 per cent down. Treasury yield rises hit big stocks such as Google and Amazon.

Apple, however, rose 2 per cent.

That was on news from analysts at JPMorgan that the tech company may be boosting supply of its new iPhone 13 in coming months.

ABC/wires