Best Buy exceeded Wall Street's quarterly earnings expectations on Tuesday, as inflation-dented demand for consumer electronics performed better than expected.
The multinational consumer electronics retailer increased 12.4 percent, outperforming the S&P 500 index. This growth came after the company predicted a smaller decline in annual sales than initially anticipated.
"People are hopeful that consumers can still squeeze out a strong holiday season despite the headwinds they're facing," Brandon Pizzurro, director of public investments at GuideStone Capital Management, said.
Best Buy's earnings ramped up the S&P 500 retail sector index, but Dollar Tree Inc's 9.4 percent drop dampened the gains.
"If you take the continuum of income and consumers out there, the upper half of that is relatively inelastic to some costs going up to some extent or another where the bottom half is going to be more sensitive," Shawn Cruz, head trading strategist at TD Ameritrade in Chicago, said.
According to Cruz, the company will be hit "pretty bad" since it lacks the ability to "pass through" the said costs.
S&P 500 posts new two-month high
Dow component Walgreens Boots Alliance Inc went up 1. 7 percent after Cowen & Co transformed the drug distributor stock, its push into the healthcare services business.
Meanwhile, markets were wary as China stepped up its fight against COVID-19, closing parks, shopping areas and museums in Beijing while other cities revived mass testing.
Shares of Chinese companies listed in the United States, such as Pinduoduo Inc, Bilibili Inc and JD.com Inc, fell about two percent each. However, risk markets were also eased as the U.S. dollar and the yield on the 10-year Treasury note fell.
The Dow Jones Industrial Average increased by 397.82 points, or 1.18 percent, to 34,098.1. The S&P 500 raised by 53.64 points, or 1.36 percent, to 4,003.58 and the Nasdaq Composite by 149.90 points, or 1.36 percent, to 11,174.41. The S&P 500 reached its highest level for the first time since September 12.
The energy sector contributed to this achievement, rising 3.18 percent after two sessions of a downturn as Saudi Arabia said OPEC+ would stick to output cuts — contradicting a report on Monday that claimed that the coalition was exploring increasing output, sending crude prices sharply lower.
Tesla Inc shares tried to recover losses, soaring 0.8 percent after dropping 6.8 percent in the previous session. Agilent Technologies Inc also rose 6.7 percent after the application-focused solutions provider reported solid fourth-quarter revenue.
On the other side of the market, Manchester United shares were up 14.66 percent after Sky News reported that the Glazer family — who owns the football franchise — was looking into financial options, including an outright sale.
Reuters reported that investors would be observing remarks by St. Louis Fed Reserve president James Bullard and Kansas City Fed president Esther George before the release of the Fed's November meeting minutes on Wednesday.
After promoting a smaller rate hike in December, Cleveland president Loretta Mester reaffirmed the Fed's standpoint that keeping inflation low is still paramount for the central bank.
Analysts anticipate low trading volumes because markets will be closed on Thursday for Thanksgiving and will only be open for a half day on Friday.