By Shristi Achar A and Shashwat Chauhan
(Reuters) -Wall Street's main indexes advanced on Tuesday as growth and chip shares gained, while stocks like General Motors (NYSE:GM) and Spotify rose on upbeat earnings updates ahead of quarterly reports from big technology companies.
Megacap growth stocks including Meta Platforms, Microsoft (NASDAQ:MSFT) and Alphabet (O:GOOGL) gained between 1.4% and 2.6%. The tech majors are scheduled to report their quarterly numbers this week, with Tesla (NASDAQ:TSLA) kicking off the cycle after markets close on Tuesday.
Rising chip stocks also offered support to equities, with Nvidia, Micron Technology (NASDAQ:MU) and Advanced Micro Devices (NASDAQ:AMD) up between 2.5% and 3.3%.
On the earnings front, General Motors advanced 4.6% after the automaker posted quarterly results above Wall Street targets and raised its annual forecast.
Spotify (N:SPOT) jumped 14.1% after the Swedish music streaming company's quarterly gross profit topped 1 billion euros ($1.1 billion) for the first time.
GE Aerospace rose 6.2% after the aerospace giant raised its full-year profit forecast.
Danaher (NYSE:DHR) gained 7% after the life sciences firm beat quarterly profit and sales expectations.
On the flipside, JetBlue plunged 17.2% as the low-cost airline trimmed its annual revenue forecast after reporting lukewarm first-quarter revenue.
"Some of the commentary has come off about the macro environment and people are now more focused on the earnings," said Brent Schutte, chief investment officer at Northwestern Mutual Wealth Management Company.
"The outlook has remained fairly solid in the early innings of the earnings reports. This week is huge and it will set the tone for how we do in the next few."
Of the 102 S&P 500 companies that have reported so far, 79.4% came in above analyst expectations, as per LSEG I/B/E/S data.
Lifting equities further, data showed U.S. business activity cooled in April to a four-month low due to weaker demand, while rates of inflation eased slightly even as input prices rose sharply.
U.S. equities sold off sharply last week amid heightened tensions in the Middle East and as traders re-evaluated their rate-cut expectations from the Federal Reserve, with the focus now shifting to the Personal Consumption Expenditures (PCE) index reading for March on Friday.
Money markets are now pricing in just about 43 basis points of interest-rate cuts, down from about 150 bps seen at the start of the year, according to LSEG data.
At 11:20 a.m. ET, the Dow Jones Industrial Average was up 226.15 points, or 0.59%, at 38,466.13, the S&P 500 was up 53.38 points, or 1.07%, at 5,063.98, and the Nasdaq Composite was up 221.35 points, or 1.43%, at 15,672.66.
Ten of the 11 major S&P 500 sectors were trading higher, with communication services amongst top gainers, up 1.7%.
Among other stocks, Hibbett surged 19.1% as JD Sports Fashion proposed to buy the athletic fashion retailer for about $1.08 billion.
Advancing issues outnumbered decliners by a 5.56-to-1 ratio on the NYSE and by a 3.28-to-1 ratio on the Nasdaq.
The S&P index recorded nine new 52-week highs and one new low, while the Nasdaq recorded 30 new highs and 64 new lows.