NEW YORK (CNNMoney.com) - The interest rate outlook trumped record oil prices for investor attention Tuesday as stocks raced ahead on signs that the Federal Reserve's rate hiking campaign could be close to an end.

The Dow Jones industrial average (up 194.99 to 11,268.77, Charts) added 195 points, its biggest one-day point gain in nearly a year. The broader Standard & Poor's 500 (up 22.32 to 1,307.65, Charts) index surged 1.7 percent. The Nasdaq composite (up 44.98 to 2,356.14, Charts) gained nearly 2 percent.

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The strength of the stock rally Tuesday was impressive, but perplexing, said Donald Selkin, director of research at Joseph Stevens.

"I didn't think the background news justified this kind of gain," he said. "The Fed fear got ratcheted down a bit and maybe people are betting that the earnings will be good, but you've still got oil prices at all-time highs and gold rising."

In addition to reduced interest-rate hike expectations and earnings, stocks may have benefited Tuesday from having done poorly over the last few weeks.

The gains looked to extend into early Wednesday, thanks to some upbeat after-hours earnings reports from the tech sector.

After the close of trade, IBM reported quarterly earnings of $1.08 per share, more than expected and up from a year earlier. The company also reported quarterly revenue that fell from the prior year and met analysts' expectations. IBM (Research) shares were little changed in extended-hours trading.

Also after the close, Texas Instruments (Research) reported higher quarterly earnings and revenue that topped estimates. The chipmaker also forecast bullish second-quarter results, due to continued strong demand for its products.

Also after the close, Yahoo! (Research) reported quarterly earnings that fell from a year earlier, but met analysts' estimates. Shares gained around 5 percent in extended-hours trading.

A slew of big companies report earnings Wednesday, including Dow components Coca-Cola (Research), Honeywell (Research), JP Morgan Chase (Research) and Pfizer (Research).

The March consumer price index is also due Wednesday, as is the weekly oil inventories report.

A midday rally crescendoed Tuesday afternoon after the minutes from the Fed's March 27-28 meeting showed most members of the policy setting committee thought that the end of rate hikes was "likely to be near," and some expressed concerns about the dangers of tightening too much. (Read the minutes.)

"What the stock market is pleased about is the increasing prospect that at some point fairly soon the Fed will pause with rate hikes," said Allen Sinai, president and chief global economist at Decision Economics Inc.

Investors have been worrying that rising inflationary pressure could cause the central bank to boost short-term interest rates for longer than had been previously expected. "Any type of pause or slowdown (in rate hikes) is a welcome fundamental positive for the stock market," Sinai said.

The Fed has raised its target for the fed funds rate 15 straight times since June 2004 to 4.75 percent. Economists widely expect another quarter percentage point hike in May, but it remains unclear whether the Fed will keep raising rates beyond then.

A tame report on wholesale prices and comments from San Francisco Federal Reserve President Janet Yellen, who voiced concerns the Fed's rate hiking campaign could slow the economy too quickly, lifted stocks earlier in the session, overshadowing a climb in oil prices to an all-time high above $71 a barrel.

The Producer Price Index (PPI) rose 0.5 percent in March, versus forecasts for a rise of 0.4 percent. But the core PPI, a closely watched inflation measure, rose a less-than-expected 0.1 percent. The measure of prices excluding food and energy was forecast to rise 0.2 percent.

Investors breathed a big sigh of relief on the Fed minutes and encouraging reading on wholesale prices, but soaring energy prices and a tight labor market remain inflation risks.

"The staying power of the rally is the question mark," Sinai said. "You have to remember the views held by the Fed on March 28 are not necessarily the views held when they meet next on May 10."

Blue chips gained across the board, with all 30 Dow components rising.

Economically-sensitive stocks like Alcoa (up $1.16 to $35.16, Research), DuPont (up $0.70 to $43.67, Research), Honeywell (up $1.28 to $44.16, Research) and Caterpillar (up $2.46 to $78.91, Research) led the winners.

The Dow's tech components bounced, including Hewlett Packard (up $1.45 to $33.48, Research), IBM (up $1.67 to $83.31, Research) and Microsoft (up $0.38 to $27.22, Research).

Dow component Exxon Mobil (up $1.49 to $63.54, Research) gained amid a broader rise in oil stocks. The Amex Oil (up 24.97 to 1,153.01, Charts) index added 2.2 percent.

Micron Technology (up $0.91 to $16.03, Research) rose 6 percent on a J.P. Morgan upgrade. It was one of many chip stocks rising. The Philadelphia Semiconductor (up 17.02 to 517.46, Charts) index, or the SOX, added 3.4 percent.

Financial, telecom, home building, gold and silver shares all rallied on the session.

A notable decliner was UnitedHealth Group (down $2.00 to $49.67, Research) which lost nearly 4 percent and topped the New York Stock Exchange's most-actives list after warning that 2007 earnings will miss estimates. That overshadowed the health insurer's strong quarterly earnings report.

Merrill Lynch (up $0.92 to $79.38, Research) shares rose after the company reported higher-than-expected quarterly earnings.

Dow component Johnson & Johnson (up $0.48 to $58.13, Research) reported higher first-quarter earnings that topped estimates. The drugmaker said sales of medical devices and a break up fee from its failed attempt to buy Guidant offset weaker prescription drug sales.

Boston Scientific (up $0.26 to $21.74, Research), which is expected to complete its purchase of Guidant this week, reported a small decline in first-quarter profit due to weaker sales of its heart stent.

Market breadth was positive. On the New York Stock Exchange, winners topped losers by nearly four to one on volume of 1.84 billion shares. On the Nasdaq, advancers topped decliners seven to three as 2.25 billion shares exchanged hands.

In addition to the PPI, investors took in a separate economic report showing further erosion in the housing market. March housing starts and building permits slipped from the previous month by a greater-than-expected amount.

U.S. light crude for May delivery rose 95 cents to a fresh settlement record of $71.35 a barrel on the New York Mercantile Exchange, after reaching an intraday record of $71.60. Oil prices have been rising steadily in recent weeks amid worries about Iran's nuclear capability.

Treasury prices rose, lowering the yield on the benchmark 10-year note yield to 4.98 percent from 5.01 percent late Monday. Bond prices and yields move in opposite directions.

COMEX gold for June delivery rose $4.40 to $623.20 an ounce, a fresh 25-year high.

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