Stocks closed higher on Tuesday, helped by stronger-than-expected quarterly reports and after mixed inflation data.
The Dow Jones industrial average rose 139.40 points at session highs before closing approximately 75 points higher, with UnitedHealth contributing the most gains to the tune of 59 points. That said, IBM shaved off about 26 points on the Dow.
The S&P 500 gained 0.6 percent, with health care and materials leading all sectors higher. Meanwhile, the Nasdaq composite outperformed, popping approximately 0.9 percent.
Goldman Sachs continued what has already been a very strong earnings season for the big banks, easily beating estimates on both the top and bottom line. Johnson & Johnson also beat Wall Street estimates.
"The key to the market rising more here will be better earnings growth," said Ernesto Ramos, head of equities at BMO Global Asset Management.
With 52 S&P components having reported as of Tuesday morning, third-quarter earnings have shown growth of 8.19 percent, according to data from The Earnings Scout. Of the 52 firms that have reported, 83 percent have beaten bottom-line estimates, the data also showed.
"We've had companies on a number of sectors ... that have beat on the bottom line, so that's driving the market," said Mike Baele, managing director at U.S. Bank Private Client Reserve.
On Monday after the close, streaming giant Netflix beat expectations on both lines, bolstered by international subscriber growth that blew away any guidance. Netflix shares rose nearly 20 percent Tuesday, posting its best day since April 2013.
Health insurance giant UnitedHealth saw its stock pop nearly 7 percent on the back of strong quarterly results, marking its best session since April 2011.
"We're finally in the heart of earnings season, so we now have numbers to back things up with," said Art Hogan, chief market strategist at Wunderlich Securities. "Last week was a false start."
U.S. stock futures surged amid the quarterly reports on Tuesday. Dow futures rose more than 100 points, while S&P and Nasdaq futures gained 14 points and 42 points, respectively, before the open.
"Although the third quarter reporting season has kicked off solidly, the recovery will need to accelerate for corporate executives to surpass their aggressive profit forecasts for next year," said Jeremy Klein, chief market strategist at FBN Securities, in a note.
On the data front, the Labor Department said on Tuesday its Consumer Price Index rose 0.3 percent, meeting expectations. That said, the so-called core CPI rose just 0.1 percent, missing expectations.
"The inflation data, to me, was disappointing. On the surface, the nominal number was fine. But the core ... disappointed," said Phil Orlando, chief equity strategist at Federated Investors. "This has got to raise questions about the Fed's narrative to raise rates in December."
Still, Orlando said he expects the Federal Reserve to hike for the first time this year in December. According to the CME Group's FedWatch tool, market expectations for a December rate hike are more than 60 percent.
Minutes from the Federal Reserve's discount rate meeting released Tuesday showed nine regional Federal Reserve banks pushed for an increase in the rate commercial banks are charged for emergency loans in September.
There are no other major economic data due Tuesday, but the Fed's Beige Book, housing starts and existing home sales are some key data scheduled for release later this week.
In oil markets, U.S. crude settled 0.7 percent higher, at $50.29 a barrel as the U.S. dollar traded flat to slightly lower.
The dollar fell slightly against a basket of currencies, with the euro near $1.098 and the around 103.8. The British pound, which had recently sold off amid concerns over a "hard Brexit," rose approximately 1 percent against the greenback following stronger-than-expected U.K. inflation data.
"The UK's CPI data has printed terrific number and came well ahead of the expectations. The problem is that this much increase in the inflation number,and at this pace is going to make the people a lot more poor on the street. And this is when we have a serious problem," Naeem Aslam, chief market analyst at Think Markets, said in a note to clients.
European stock markets rose broadly on Tuesday, with the pan-European Stoxx 600 index gaining 1.5 percent.
The climbed 13.10 points, or 0.62 percent, to end at 2,139.60, with materials and health care leading all 11 sectors higher.
The Nasdaq composite advanced 44.01 points, or 0.85 percent, to close at 5,243.84.
About three stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 724.19 million and a composite volume of 3.1 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded lower near 153.
Gold futures for December delivery settled $6.30 higher at $1,262.90 an ounce.
CORRECTION: This story has been updated to reflect that Federated's Phil Orlando said the September core CPI "has got to raise questions about the Fed's narrative to raise rates in December." An earlier version of this story misstated the month.
On tap this week:
Earnings: Intel, Yahoo, Intuitive Surgical, Pinnacle Financial
4 p.m. TIC data
Earnings: American Express, Morgan Stanley, US Bancorp, M&T Bank, eBay, Abbott Labs, Halliburton, St. Jude Medical, Tupperware, Supervalu, Unifirst, Tractor Supply, SLM, Citrix, Canadian Pacific Railroad, Northern Trust
8:30 a.m. Housing starts
8:45 a.m. San Francisco Fed President John Williams
1:30 p.m. Dallas Fed President Rob Kaplan
2 p.m. Beige book
7:45 p.m. New York Fed President William Dudley
Earnings: Microsoft, Verizon, Travelers, Union Pacific, Bank of NY Mellon, Walgreens BootsAlliance, Illinois Tool Works, E*Trade, Dunkin Brands,American Airlines, Alaska Airlines, Pulte Group, Fifth Third, KLA-Tencor, Advanced Micro
7:45 a.m. European Central Bank rate decision
8:30 a.m. New York Fed's Dudley welcoming remarks at NY Fed workshop on financial industry
8:30 a.m. Initial claims
8:30 a.m. Philadelphia Fed survey
10 a.m. Existing home sales
4:45 p.m. New York Fed's Dudley closing comments at workshop on financial services
10:15 a.m. Fed Gov. Daniel Tarullo
2:30 p.m. San Francisco Fed's Williams