By Liz Moyer
Investing.com -- U.S. stocks roared back after a strong retail sales report and reassurances from Federal Reserve Chair Jerome Powell on the central bank's determination to tame inflation.
Retail sales rose 0.9% in April from the previous month and 8.2% over one year, good news for retailers, which are reporting earnings this week. Walmart Inc (NYSE:WMT) disappointed on its earnings, hit by rising costs, but Home Depot Inc (NYSE:HD) sales rose to record levels and it raised its 2022 guidance. More retail reports are due out Wednesday from Target (NYSE:TGT) and Lowe's (NYSE:LOW), among others.
Powell said Tuesday that the Fed has the "resolve" to get inflation back down and he wouldn't quit until he saw clear evidence that it was on its way down. That fueled stocks heading into the close, with all three indexes closing higher.
This is another indication for investors that the Fed won't try to raise rates more rapidly than the half-point increments it has been signaling. Most still expect the central bank to raise its benchmark rate by that amount when it meets again next month, but some had feared a more aggressive three-quarter point hike.
But analysts are lowering their forecasts for growth in the S&P 500 this year to take into account companies dealing with rising costs and ongoing supply issues.
Also working in investors' favor was news that Covid-19 lockdowns in China were set to ease in the coming weeks. The lockdowns had heightened concerns about a global slowdown. There is still the uncertainty stemming from Russia's war on Ukraine, however.
Here are three things that could affect markets tomorrow:
1. Cisco earnings
The cloud computing company Cisco Systems Inc (NASDAQ:CSCO) is expected to report earnings of 86 cents a share on revenue of $13.3 billion, according to analysts tracked by Investing.com. Analysts will be listening to what the company says about sales growth as the work-from-home trend continues.
2. Lowe's outlook
Coming off of earnings from Home Depot, Lowe's is expected to report EPS of $3.23 on revenue of $23.7 billion, and analysts will be listening for its view on housing and construction trends.
3. Target reports
Walmart competitor Target is expected to report EPS of $3.06 on revenue of $24.4 billion. Analysts will be listening for any similarities Target is seeing in terms of costs, supply and inventories.