Technology shares led US stock indexes higher Tuesday ahead of a spate of major earnings reports.
The tech-heavy Nasdaq Composite jumped 1.6%, extending its rebound from a recent selloff to a second consecutive day. The S&P 500 rose 1.2%, and the Dow Jones Industrial Average was 0.7% higher.
Investors were encouraged by strong earnings reports before the opening bell from General Motors, United Parcel Service and GE Aerospace, which reported earnings as a stand-alone company for the first time since separating from General Electric's power business.
Tesla reported a sharp drop in first-quarter profit and falling revenue after the close, but said it was accelerating the launch of new vehicles, including affordable models. Investors sent the shares higher in postmarket trading. Elon Musk's electric-vehicle maker was down more than 40% this year through Tuesday.
Stocks' hot start to the year had recently been brought to a halt by fears of a broader conflict between Iran and Israel, rising oil prices and climbing bond yields; the S&P 500 fell more than 5% in under a month. Now oil prices have dropped off their highs and Treasury yields have stabilized, and investors appear more optimistic.
For the year, the S&P 500 is up 6.3%.
"The commotion around Iran and Israel is dissipating and investors have been able to focus on earnings and fundamentals," said Art Hogan, chief market strategist at B Riley Wealth Management.
Brent crude, the international oil benchmark, rose to close at $88.42 a barrel, but remained off its recent high of $91.17 hit earlier this month.
The benchmark 10-year Treasury note yield fell to 4.597%, from 4.622% Monday . Yields had risen quickly in recent weeks after a string of strong economic data had investors questioning whether the Federal Reserve will cut interest rates this year at all.
The latest S&P Global PMI survey out Tuesday showed the U.S. private sector growing in April but at a slower pace, an encouraging sign for investors worried that the economy is running too hot.
"Today's data is helping alleviate fears of the central bank staying restrictive for too long," wrote José Torres, senior economist at Interactive Brokers.
Other data out Tuesday showed new-home sales jumping in March from the previous month and exceeding economist expectations. A State Street ETF tracking home-builder stocks had its best day of the year, jumping 2.7%.
In single stock moves, GM, GE Aerospace and Danaher all jumped at least 4% after reporting earnings. Stock index compiler MSCI was among the day's laggards, dropping 13% after its revenue missed expectations.
Overseas, European stocks climbed, lifted by strong Novartis and SAP earnings.
The earnings onslaught continues later this week, with Meta, Microsoft and Google-parent Alphabet all set to report results. Traders will be closely watching Microsoft's commentary on the outlook for its artificial-intelligence products to see if it matches the lofty expectations AI-mania investors have priced in.