The Dow Jones Industrial Average soared over 700 points on Tuesday in its bestday in over a year as market sentiment was boosted on bets that interest rate cuts are on the near-term horizon. The S&P 500 Index also rose over 0.6%, while the tech-heavy Nasdaq Composite advanced 0.2%.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): +0.64% or +35.98 points to 5,667.20

Dow Jones Industrial Average (DIA  ): +1.85% or +742.76 points to 40,954.48

Nasdaq Composite Index (QQQ  ): +0.20% or +36.77 points to 18,509.34

In Economic News:

U.S. Retail Sales were flat in June, the Census Bureau reported Tuesday, topping expectations for a decline as consumers continue to spend despite other signs of slowing across the U.S. economy. May's print was also revised higher to an increase of 0.3% from the prior reading of 0.1%. Excluding auto and gas sales, June sales increased by 0.8%, also beating economist estimates.

"The report shows that the consumer is holding in there well and maybe is not spending at the heady pace that we saw in the second half of last year but is certainly not falling off a cliff," said Robert Sockin, senior global economist at Citi, in a statement to Yahoo Finance. "I think for the [Federal Reserve], this will take some urgency off of easing rates, out of fears that the economy may be slowing down more sharply. So I think they're going to still signal at the July meeting a September cut is very likely, given progress on inflation."

Traders appear to agree with Sockin, now pricing in a more than 93% chance the Fed's target range for the federal funds rate to be lowered by a quarter percentage point to 5.00% to 5.25% in September from its current range of 5.25% to 5.50%, according to the CME FedWatch tool.

On the Earnings Front:

Bank of America (BAC  ) reported second-quarter revenue and profit on Tuesday that topped Wall Street expectations as the bank benefited from rising investment banking and asset management fees. The firm saw a 29% increase in investment banking fees to $1.56 billion, while its asset management fees rose 14% to $3.37 billion.

Morgan Stanley (MS  ) also posted second-quarter profit and revenue on stronger-than-expected trading and investment banking results on Tuesday. The bank's investment banking revenue rose 51% to $1.62 billion, boosted by an increase in fixed income underwriting activity. Fixed income trading revenue also rose 16% to $1.99 billion.

UnitedHealth Group (UNH  ) shares ticked higher after the health insurance company reported better-than-expected second-quarter results on Tuesday. The company said it expects a $0.30 per share impact to full-year adjusted profit from disruptions caused by the cyberattack at its Change Healthcare unit. United also reiterated its full-year profit forecast to be between $27.50 and $28.00 per share.

"The diversified, durable growth across UnitedHealth Group stems from our colleagues' commitment to ensuring high-quality, affordable care is available to the people we serve, and positions us well for the near and long-term," said CEO Andrew Witty in a release.

For Wednesday:

Market participants will react to fresh housing market data for June on Wednesday, along with some Fedspeak and the release of the central bank's Beige Book in the afternoon. Earnings reports for Wednesday include Johnson & Johnson (JNJ  ), ASML Holding (ASML  ) and U.S. Bancorp (USB  ).