The Dow Jones Industrial Average rallied on Tuesday, rising for a fifth day as earnings results from Walmart and Home Depot showed consumer spending could remain strong enough to keep the economy from tipping over into a downturn.

The Dow rallied 239.57 points, or 0.71% to close at 34,152.01, while the S&P 500 inched 0.19% higher to 4,305.20. The Nasdaq Composite slipped 0.19% to 13,102.55.

The 30-stock index opened Tuesday's session in negative territory before rallying as much as nearly 369 points at session highs thanks to a boost from Walmart and Home Depot. Shares of both retailers popped as Walmart reiterated its second-half outlook{

Walmart beats expectations, reiterates forecast

Shares of Walmart jumped 3% in the premarket after the retailer beat estimates on the top and bottom lines. The company posted adjusted earnings per share of $1.77 on revenues of $152.86 billion.

Walmart reaffirmed its forecast for the second half of the year and stood by its profit warning from last month when it cut expectations, citing inflationary concerns. The retailer expects earnings per share to decline between 9% and 11% for the full year.

— Samantha Subin

Home Depot tops earnings estimates, posts record sales

Home Depot reported $5.05 in adjusted earnings per share for the last quarter, more than $4.94 expected by analysts, according to Refinitiv. The home improvement retailer's $43.8 billion in sales for the period were a record. Home Depot also reaffirmed its 2022 guidance of 3% sales growth.

The shares, which have rebounded by more than 14% so far this quarter, were fluctuating in premarket trading.

Retail names including Target, Best Buy and Bath & Body Works gained 4% each on the back of those results. Earnings for the sector are set to continue with reports from Target and Lowe's on Wednesday.

"We still have a lot of retail stocks that are going to report," said Adam Sarhan, founder and CEO at 50 Park Investments. "But by and large, if at the end of the week, we're still up and we're up nicely, and those retailers don't give back those gains they're enjoying today, that's going to be strengthening the bullish case."

In other news, Bed Bath & Beyond shares staged a rally{

Bed Bath & Beyond having another wild meme trading day

Bed Bath & Beyond shares soared on Tuesday as Reddit traders piled into the stock, encouraged by news that GameStop chairman Ryan Cohen placed another bet on the struggling retailer.

Shares of Bed Bath & Beyond skyrocketed more than 70% to an intraday high of $28.04 in midday trading Tuesday amid multiple trading halts due to volatility. The stock last traded up 57%.

Cohen purchased distant out-of-the-money call options on more than 1.6 million Bed Bath & Beyond shares with strike prices between $60 and $80. The stock closed Monday at $16.

Bed Bath & Beyond's trading volumes jumped on Tuesday with more than 160 million shares changing hands as of noon ET. According to a regulatory filing, the company has only 80 million shares outstanding.

— Yun Li

Wall Street is coming off a solid session, with the major averages all rising Monday after a sharp intraday turnaround and building on the market's rally off a June low.

The Dow notches a fifth day of gains, S&P 500 ends Tuesday higher

The Dow Jones Industrial Average closed higher on Tuesday, adding 239.57 points, or 0.71%, to end at 34,152.01. Shares of Walmart and Home Depot helped lift the 30-stock index, as both retailers gained on strong quarterly results.

The S&P 500 ticked 0.19% higher to close at 4,305.20. The Nasdaq Composite slipped 0.19%, ending the session at 13,102.55.

-Darla Mercado

Dow rally loses steam, S&P and Nasdaq turn negative into final hour

The Dow's roughly 368-point rally lost steam heading into the finally hour of trading, while the S&P 500 and Nasdaq Composite veered back into negative territory.

The Dow was last up 192 points, or 0.57%, while the S&P traded marginally lower and the Nasdaq slipped 0.45%.

— Samantha Subin

The market is 'ripe' for a short-term pullback, Morgan Stanley's Slimmon says.

Markets are poised for a short-term pullback amid the recent rally, Morgan Stanley Investment Management's Andrew Slimmon said.

Equities should end the year higher, or close near where markets began 2022, but investors should expect a pause over the next few weeks, Slimmon said.

The senior portfolio manager believes that markets remain overbought, especially after taking a strong leg higher within a short period of time.

"Pullbacks are being used as an opportunity to get cash to work for those that missed out over the last month's significant rally," Slimmon said, noting that some of Tuesday's moves may be triggered by investors who missed out on the recent rally. "I think that is propping up the market a little bit more than it probably should at a time when you know the market is ripe for a consolidation."

— Samantha Subin

The S&P 500 is testing an important resistance level

The S&P 500 is coming up against its 200-day moving average, a key resistance level closely watched by traders.

The 200-day moving average is 4,326, and the S&P came as close as 4,325 and backed away in afternoon trading. If the index rises above the 200-day and closes there for a period of time, it would be perceived as a bullish sign, indicating possible further gains.

Tests of resistance can take place across multiple trading sessions. The S&P 500 was at 4,319 at 2:30 p.m. ET.

"It's an important test of a closely watched moving average, often thought to be the demarcation between the bull and bear trend," said Oppenheimer technical strategist Ari Wald. "I think you're watching how the market responds. It could be a level to see some profit taking. A sustained move above it would be an indication of strong buying demand."

The 200-day is basically the average of the last 200 closing prices of an index or stock. It is viewed as a momentum indicator. The S&P 500 was last above its 200-day in April.

— Patti Domm

Bed Bath & Beyond downgraded midday during stock surge

Bed Bath & Beyond has skyrocketed today, fueled by meme-stock traders snapping up shares and potentially boosted by a short squeeze.

That's an opportunity to sell, according to Alex Arnold at Odeon Capital Group. The firm on lowered its rating on the retailer to sell from hold while maintaining its $7.50 price target.

While Arnold ultimately thinks the retailer could turn itself around, the runup in shares is premature, he said.

Read more at CNBC PRO.

— Carmen Reinicke

Retailers are the standouts in a lackluster market day

Retailers were the standout sector Tuesday, following better-than-expected earnings from Walmart and Home Depot and as the speculative fervor around Bed Bath and Beyond continued.

Walmart jumped 5.5%, and Home Depot was 5.1% higher. Bed Bath and Beyond was up 60% in afternoon trading, as meme traders reacted to news that GameStop founder Ryan Cohen's venture capital firm RC Ventures made another big bet on the retailer through an options trade.

The S&P consumer discretionary sector, which includes retail names, was the top sector, up 1.7%, followed by consumer staples, up 1.3%. Financials were the third best performing major sector with a 1% gain. Tech was flat to negative, and energy was the worst performer, down 2.4%.

Other retail names also popped. Macy's jumped more than 7%, and Best Buy rose more than 6%. Target, which is reporting earnings Wednesday, rose nearly 6%. Online retailer Amazon was up just 1.8%.

"Oil falling below $87 is helping as well," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. High gasoline prices have been a head wind for retailers, and prices at the pump should fall further if oil continues to decline.

Market breadth was mixed. About 140 more stocks were advancing than declining on the New York Stock Exchange in lackluster trading. Market leader Apple was down 0.1%.

Dow components Walmart and Home Depot helped the Dow Jones Industrial Average outperform, and it was up 1% in afternoon trading. The small cap Russell 2000, which has been leading lately, was barely higher, up 0.2%. Nasdaq was flattish, up 0.3%.

The S&P 500 gained 0.6%, at 4323, very close to a next level of resistance at 4,326. That is the 200-day moving average, and it would be viewed as a very positive momentum indicator if the index were to rise above it and hold.

— Patti Domm

Airlines outperform, with American climbing more than 2%

Airline stocks are outperforming on Tuesday as investors are betting on consumer-centric stocks.

The U.S. Global Jets ETF was up 1.3% in afternoon trading. Shares of the three biggest U.S. airlines ¯ United, Delta and American — were all up at least 22%.

The stocks may be getting a boost from signs that the U.S. consumer is continuing to spend despite high inflation. Strong earnings reports from Walmart and Home Depot and the upbeat demand outlook from Carnival could be seen as positives for airlines.

Falling oil prices could also be catalyst for the stocks. Futures for U.S. benchmark West Texas intermediate crude have fallen more than 3% on Tuesday.

—Jesse Pound

Amazon accuses FTC of harassing Bezos and Jassy

Amazon accused the Federal Trade Commission of harassing executive chairman Jeff Bezos and chief executive Andy Jassy, both of whom were asked to testify as part of the FTC's investigation into Amazon Prime.

The tech giant said a "legitimate reason" is needed for testimony from the two leaders, according to a legal filing from the company's lawyers hoping to quash the civil investigation demands.

The FTC's demand for Bezos and Jassy to testify "on an open-ended list of topics on which they have no unique knowledge is grossly unreasonable, unduly burdensome, and calculated to serve no other purpose than to harass Amazon's highest-ranking executives and disrupt its business operations," lawyers for the company said in a legal filing.

The FTC is looking into concerns that Prime is misleading users on how to sign up or cancel their subscription service. Earlier this year, an Insider report found that Amazon had been "concerned" its user design was leading some customers to feel "manipulated" into signing up for Prime. However, an Amazon spokesperson at the time called the process "simple and transparent" in response.

An FTC spokesperson declined a comment to CNBC.

— Sarah Min

Carnival rises on increased bookings

Shares of Carnival Cruise Lines gained 3.5% Tuesday after the company said that its bookings for Aug. 15 were nearly double the equivalent day in 2019, showing that cruise travel is experiencing a healthy rebound.

The increased bookings come after the company on Friday announced that it would eliminate Covid testing requirements for vaccinated travelers. It also eliminated the exemption request process for unvaccinated guests and now only requires that they show a negative test when they board. These new rules start for cruises leaving Sept. 6 or later and lasting 16 nights or less.

Carnival changed its requirements in-line with the CDC streamlining its guidance for Covid-19 last week.

— Carmen Reinicke

Ally Financial jumps 3% on Berkshire stake, ZipRecruiter slides

Shares of Ally Financial jumped 4% on Tuesday following news that Berkshire Hathaway more than tripled its position in the home and auto lender in the recent quarter.

Meanwhile, ZipRecruiter's stock shed 5% despite an earnings beat as it lowered its full-year revenue outlook and noted that employers are slowing job postings.

— Samantha Subin

Walmart shares rise nearly 6% despite last month's profit cut

Walmart shares jumped nearly 6% on Tuesday after the retailer reported results that beat expectations on the top and bottom lines.

The retailer's results signaled that the consumer may be holding up better than anticipated even as its profits remain under pressure in the face of inflation.

At the same time, Walmart stuck by its profit outlook for the second half, which it cut last month as consumers shift spending away from discretionary purchases. The retailer reaffirmed that warning on Tuesday.

— Samantha Subin

Bed Bath & Beyond having another wild meme trading day

Bed Bath & Beyond shares soared on Tuesday as Reddit traders piled into the stock, encouraged by news that GameStop chairman Ryan Cohen placed another bet on the struggling retailer.

Shares of Bed Bath & Beyond skyrocketed more than 70% to an intraday high of $28.04 in midday trading Tuesday amid multiple trading halts due to volatility. The stock last traded up 57%.

Cohen purchased distant out-of-the-money call options on more than 1.6 million Bed Bath & Beyond shares with strike prices between $60 and $80. The stock closed Monday at $16.

Bed Bath & Beyond's trading volumes jumped on Tuesday with more than 160 million shares changing hands as of noon ET. According to a regulatory filing, the company has only 80 million shares outstanding.

— Yun Li

Retail stocks jump following Walmart, Home Depot results

Retail stocks rose Tuesday on the back of strong results from both Walmart and Home Depot.

Shares of Target, Bath & Body Works, Ross Stores and Best Buy jumped more than 3% each, pushing the S&P 500's consumer discretionary sector up 1%. Consumer staples added 1%, boosted by shares of Walmart, Costco and Kroger.

— Samantha Subin

Tech, semiconductor stocks slip

Technology stocks moved lower on Tuesday led by shares of semiconductor names such as Nvidia, Applied Materials and Qualcomm, which fell more than 1% each. Big tech stocks including Apple, Meta Platforms, Netflix and Microsoft also dipped into negative territory.

The S&P 500's information technology sector was last down 1%. Within the sector, shares of solar stocks Enphase Energy and SolarEdge fell more than 2% each.

At the same time, consumer staples rose more than 1% boosted by shares of Walmart and Kroger.

— Samantha Subin

Natural gas prices jump

Natural gas prices jumped on Tuesday as parts of the U.S. grapple with high summer temperatures. U.S. futures added 5.55% to trade at $9.21 per million British thermal units.

In Europe, futures advanced 7% to 244.4 euros per megawatt hour. The gain comes after the contract closed at a record level on Monday, amid the continent's worsening energy crisis.

— Pippa Stevens

Jeremy Siegel says the June low was a market bottom

You can count Jeremy Siegel among the group that is feeling more bullish about the U.S. economy and the stock market after the July economic data releases.

The Wharton professor said on CNBC's "Squawk Box" that he is growing more confident in the Fed pulling off a "soft landing" and that stocks appear to be on solid footing after a rough start to the year.

"I think the market has it right here, I think June will be a bottom, and I think the second half of the year will be quite good," Siegel said.

Check out more of Siegel's analysis on CNBC Pro.

— Jesse Pound

Dow rises, S&P 500 and Nasdaq slip

The Dow rose 34 points on Tuesday, or 0.1%, led by gains from Walmart and Home Depot, which jumped more than 1% and 5%, respectively. The S&P 500 slipped 0.14%, while and Nasdaq Composite edged 0.44% lower.

— Samantha Subin

Industrial production increased faster than estimate in July

Industrial production rose more than expected in July at a time when concern are rising over the U.S. manufacturing sector.

The measure of activity in manufacturing, mining and electrical and gas utilities increased 0.6% on the month, compared to the Dow Jones estimate for 0.3%, according to Federal Reserve data Tuesday. Manufacturing was particularly strong, rising 0.7% after falling for two months in a row.

Those numbers come the day after a stunning slide in the New York Fed's Empire Manufacturing Index, which collapsed 42 points for a reading of minus-31.3.

However, the national numbers show activity 3.9% above its level at the same period a year ago.

Also Tuesday, the Fed said capacity utilization totaled 80.3%, slightly above the estimate. The metric calculates the output level compared to full potential, and the current reading is 0.7 percentage point above its long-run average, according to the Fed.

—Jeff Cox

Futures slip ahead of open

Stock futures slipped ahead of market open on Tuesday. Futures tied to the Dow were last down 59 points, or 0.17%. S&P 500 and Nasdaq 100 futures fell 0.23% each.

— Samantha Subin

Housing starts show sharp decline in July

A fresh batch of economic data Tuesday morning shows the housing market industry is still under pressure.

Housing starts totaled 1.446 million in July, a slide of 9.6% from June, according to the Commerce Department. Economists surveyed by Dow Jones had been looking for 1.52 million on the starts number, which would have been a drop of 2.5%.

On building permits, they totaled 1.674 million, a 1.3% decline from a month ago. However, that was a bit better than the 3.3% estimate.

Construction has slowed as mortgage rates and building costs have shot higher this year. The slump in housing has weighed on broader economic growth, as the industry contributes more than 15% of national GDP.

—Jeff Cox

Zoom sputters in premarket trading

Zoom dropped 3% in Tuesday premarket trading after Citi downgraded the stock to sell from neutral. Shares of the video teleconferencing platform are down 38% this year as the company struggles to sustain momentum from its pandemic highs.

— Sarah Min

Most investors think inflation is heading lower, Bank of America survey shows

Nearly all professional investors are looking for lower inflation over the next year and have been loading up on U.S. stocks, according to the latest Bank of America Fund Manager Survey.

Some 88% of respondents said they see inflation abating and "fear of draconian rate hikes subsiding," said Michael Hartnett, BofA's chief investment strategist. Following July's market rally, there has been a "big [August] rotation to US stocks/tech/consumer out of staples/utilities/UK."

The consumer price index was flat in July was 8.5% higher than a year ago but flat month over month, providing some hope that soaring prices may be easing.

However, Hartnett added that portfolio manager positioning is still "long stagflation," or slow growth with relatively high inflation. That means allocations are still tilted to commodities, cash and defensive stocks and away from Europe and emerging market stocks as well as consumer names.

Markets have been on a roll after bottoming in mid-June, with the S&P 500 up 11.2% over the past month alone.

Hartnett cautioned against getting carried away, though. He said the bank's investment team remains "patient bears" and would bet against stocks after the index hits 4,328, which is just 0.7% away from Monday's close.

This month's fund manager survey entailed 284 panelist overseeing $836 billion in client money.

—Jeff Cox

Walmart beats expectations, reiterates forecast

Shares of Walmart jumped 3% in the premarket after the retailer beat estimates on the top and bottom lines. The company posted adjusted earnings per share of $1.77 on revenues of $152.86 billion.

Walmart reaffirmed its forecast for the second half of the year and stood by its profit warning from last month when it cut expectations, citing inflationary concerns. The retailer expects earnings per share to decline between 9% and 11% for the full year.

— Samantha Subin

Home Depot tops earnings estimates, posts record sales

Home Depot reported $5.05 in adjusted earnings per share for the last quarter, more than $4.94 expected by analysts, according to Refinitiv. The home improvement retailer's $43.8 billion in sales for the period were a record. Home Depot also reaffirmed its 2022 guidance of 3% sales growth.

The shares, which have rebounded by more than 14% so far this quarter, were fluctuating in premarket trading.

European markets nudge higher, looking to build momentum

European markets were cautiously higher on Tuesday, having struggled to build on positive momentum seen at the end of last week.

The pan-European Stoxx 600 index climbed 0.2% in early trade, with basic resources adding 1.3% to lead gains while retail stocks slid 0.3%.

- Elliot Smith

CNBC Pro: Tesla's valuation doesn't make sense until it hits this level, fund manager says

Tesla may be one of the best-known electric vehicle makers, but fund manager and tech investor Paul Meeks thinks the stock is still too expensive.

Meeks revealed to CNBC Pro Talks the valuation at which he will find Tesla "more interesting."

Pro subscribers can read the story here.

— Zavier Ong

CNBC Pro: Strategist names the global stocks to buy despite slowing growth

There are pockets of "compelling value" in three sectors — even amid an economic slowdown, said Patrick Armstrong, chief investment officer at Plurimi Group.

These sectors are "incredibly cheap," he told CNBC's "Squawk Box Europe," naming his favorite stocks and explaining why he likes them.

Pro subscribers can read the story here.

— Weizhen Tan

Ginkgo Bioworks surges after hours

Shares of Ginkgo Bioworks stock jumped more than 20% after hours when the company raised its full-year guidance more than Wall Street analysts expected.

The company now expects full-year revenue in 2022 to be between $425 million and $440 million. Previously, the company had expected revenue in a range of $375 million to $390 million.

— Carmen Reinicke

Ziprecruiter, Compass shares slump

Shares of Ziprecruiter and Compass both fell in after hours trading Monday after each company delivered results that fell short of Wall Street's expectations.

Ziprecruiter actually posted a quarterly profit Monday after the bell, but warned that upcoming economic uncertainty may weigh on a strong labor market. The company lowered its year-end revenue outlook to reflect a weaker labor market. Shares fell more than 5%.

Shares of Compass plunged nearly 11% in after hours trading when the company said it would cut costs next year to be able to withstand a difficult housing market.

— Carmen Reinicke

U.S. stock futures open flat

U.S. stock futures opened flat Monday evening after all three major averages notched gains in the daily trading session.

Dow Jones Industrial Average futures shed 33 points, or 0.11%. On Monday, the 30-stock index closed above its 200-day moving average for the first time since late April. S&P 500 and Nasdaq 100 futures dipped 0.13% and 0.11%, respectively.

— Carmen Reinicke