The S&P 500 rose 1.0% on Tuesday, notching its third straight day of gains and its fifth in the last six sessions. The benchmark index did succumb to some early selling pressure, though, surrendering an early 1.2% gain. However, the wave of improved investor sentiment -- and a buy-the-dip mentality -- that has supported the stock market rally thus far in the new year lifted stocks from early lows.

The Dow Jones Industrial Average gained 1.1%, the Nasdaq Composite gained 1.1%, and the Russell 2000 gained 1.5%.

In addition, upbeat reports surrounding U.S.-China trade discussions helped keep the positive sentiment and buying interest intact. A scheduled two-day meeting in Beijing is now slated to extend into a third day of discussions on Wednesday.

Buying interest was largely broad-based with 10 of the 11 S&P 500 sectors finishing with gains. The real estate (+1.8%), communication services (+1.6%), industrials (+1.4%), and utilities (+1.3%) groups outperformed the broader market.

Industrial heavyweights Union Pacific (UNP 150.75, +12.10) and Boeing (BA 340.53, +12.42) carried the trade-sensitive group with respective gains of 8.7% and 3.8%.

Union Pacific's outsized gain, however, was driven more by the popular news that the company appointed industry veteran Jim Vena as its COO.  Boeing for its part reported an impressive 238 commercial airplanes deliveries last quarter. Boeing's fourth quarter deliveries helped the company set a new yearly record of 806 deliveries in 2018.

The S&P 500 financial sector (unch) and the Philadelphia Semiconductor Index (-0.5%) were two notable underperformers on Tuesday.

A flattening yield curve and a profit warning from Samsung Electronics about memory chip demand acted as headwinds for the respective groups. The financial sector, however, managed to claw its way back to its flat line after being down as much as 1.1% intraday.

The 2-yr Treasury note yield rose seven basis points to 2.59%, and the 10-yr Treasury note yield rose three basis points to 2.72%. The U.S. Dollar Index increased by 0.3% to 95.92.

Reviewing Tuesday's economic data, which included the NFIB Small Business Optimism Index for December, the JOLTS - Job Openings and Labor Turnover Survey for November, and Consumer Credit for November:

• The NFIB Small Business Optimism Index for December decreased to 104.4 from the prior reading of 104.8 in November
• The November Job Openings and Labor Turnover Survey showed that job openings decreased to 6.888 million from a revised 7.131 million (from 7.079 million) in October
• Total outstanding consumer credit increased by $22.2 billion in November after increasing a downwardly revised $24.9 billion (from $25.4 billion) in October.
  • The key takeaway from the report is that the healthy expansion in consumer credit is a good portent for consumer spending activity when matched with good feelings about job security and income growth.

Looking ahead, investors will receive the FOMC Minutes from December and the weekly MBA Mortgage Applications Index on Wednesday.

• Russell 2000 +5.8% YTD
• Nasdaq Composite +3.9% YTD
• S&P 500 +2.7% YTD
• Dow Jones Industrial Average +2.0% YTD