U.S. stocks rose Tuesday after retailers reported better-than-expected earnings and a Federal Reserve official said she could support smaller interest rate increases.
The Dow Jones Industrial Average rose 397.75 points, or 1.18%, to close at 34,098.03. The S&P 500 rose 53.69 points, or 1.36%, to close at 4,003.63, and the Nasdaq Composite rose 149.90 points, or 1.36%, to close at 11,174,41.
On Tuesday, Best Buy (BBY) jumped more than 12% after the electronics retailer hiked its 2023 outlook and beat earnings expectations. Abercrombie & Fitch (ANF) rose 19% and American Eagle Outfitters (AEO) popped 16% after both retailers reported better-than-expected earnings.
Markets had been weighed down over concerns that the Federal Reserve would continue to aggressively raise interest rates to get inflation under control. The Federal Reserve has increased interest rates an unprecedented seven times this year, the last three at 0.75% each, in its effort to slow inflation.
On Monday, Cleveland Federal Reserve President Loretta Mester said she could support reduced interest rate hikes starting next month if inflation data continues to show promise.
“That’s a huge weight off the shoulders of investors that have had absolutely nowhere to hide this year,” Phil Camporeale, managing director and asset manager at JPMorgan Asset Management, told CNBC.