Wall Street stocks rallied on Tuesday after investors saw good earnings reports from major retailers and encouraging consumer spending data.
The S&P 500 is up 0.6% as of 2:53 pm ET. The Dow Jones Industrial Average rose 131 points, or 0.4%, to 36,218 points, while the Nasdaq rose 0.8%.
Technology stocks have shown one of the most significant gains. Chipmaker Qualcomm rose 6.6%.
The growth leader was a wide range of companies that rely on consumer spending. Home Depot rose 6% after the home goods company reported strong third-quarter sales and profit amid a hot housing market. The results also boosted rival Lowe’s by 4.5%.
Healthcare companies have also grown. Communications companies and manufacturers of home and other essentials lagged behind the market.
The bond yields are up. The yield on the 10-year Treasury bond rose to 1.63% from 1.62% on Monday night.
The government said Americans were largely oblivious to last month’s price increases and increased their spending in retail stores and on the Internet. The Commerce Department said retail sales rose 1.7% in October. This is the largest gain since March, up from 0.8% in the previous month.
“This once again confirms the strength of the American consumer, but you have to wonder how inflation expectations are rising, people are rushing to get ahead of it,” said Mike Stritch, chief investment officer at BMO Wealth Management.
Several companies that depend on consumer spending have risen in price. Etsy’s online craft market grew 5.3%. Nike rose 1.9%, while Tapestry’s Coach and Kate Spade gained 2%.
The nation’s largest retailer, Walmart, also posted strong financial results, raising its earnings forecast, but the stock has regained some of the big gains it has made in the past few weeks.
Several other major retailers will release their latest financials this week. Target reports its results on Wednesday and Macy’s on Thursday.
Investors received another encouraging economic report from the Federal Reserve, which said industrial production rebounded in October with a 1.6% increase. The rise followed a 1.3% fall in September.
Wall Street is closely following the latest economic reports for more information on how businesses and consumers are coping with rising inflation. Companies are raising prices as they face higher raw material costs and supply chain challenges. Consumers were willing to pay higher prices for many products, although analysts are concerned that consumers may end up cutting costs due to inflation.
Heightened concerns about inflation last week confused the market as a whole after strong gains that lasted several weeks as companies reported mostly solid earnings. The latest round of earnings is nearing completion and there are very few sporadic events or economic reports to focus on until the end of the year.
“This story of inflation is going to be big over the next six months, and we will have many stops and starts as it develops,” Stritch said.