In a Dutch oven or large soup pot over medium heat, melt the butter. Add the chopped onion and cook until softened.

Whisk in the flour and cook for about 1 minute to remove the raw flour taste.

In a separate bowl, stir together the chicken broth and diced tomatoes.

Gradually whisk the broth mixture into the pot until completely smooth.

Stir in sugar, salt, and black pepper. Bring to a boil, then reduce heat to a simmer. Cover and prepare the dumplings.

In a large bowl, whisk together flour, sugar, baking powder, garlic powder, salt, and cayenne pepper (if using).

In a separate bowl, whisk together buttermilk and melted butter.

Pour the wet ingredients into the dry ingredients and stir just until moistened.

Gently fold in the shredded cheddar cheese.

Remove the lid from the soup and reduce heat to low. Use an immersion blender to puree the soup until completely smooth. Bring back to a gentle simmer.

Drop spoonfuls of dumpling dough directly into the simmering soup.

Cover and cook for 15–20 minutes, until dumplings are fully cooked through.

In a small saucepan, melt butter and stir in parsley and garlic powder.

Brush the garlic butter over the dumplings.

Ladle the Tomato Bisque with Cheddar Bay Dumplings into bowls and serve warm.