Stocks are rallying

Stocks rebounded on Tuesday following a flat close in the prior session.

Near 9:35 a.m. ET, the Dow was up 128 points (0.74%), the S&P 500 was up 14 points (0.69%) and the Nasdaq was up 34 points (0.73%).

All 30 stocks on the Dow are higher, as is every sector on the S&P 500.

Monday's trading saw the lowest volume of the year, second only to Easter Monday, noted Dave Lutz, head of ETF trading at JonesTrading. It was also the smallest intraday trading range for the S&P 500 in a year, he said in a note.

Crude oil prices were higher, with West Texas intermediate crude futures in New York up 0.5% to $48.35 per barrel. Later on Tuesday, the American Petroleum Institute will release its weekly inventories data.

The dollar gained as precious metals fell. The index advanced by 0.2% to 95.51. Gold slid 0.9%, or $11.15 an ounce, to $1,240.25.

In economic data, new home sales for April and the Richmond Fed's manufacturing index will be released at 10 a.m. ET.

In earnings, Best Buy topped analysts' forecasts for profits and sales, but its guidance for second-quarter earnings were lower than expected. Its shares fell 4% pre-market.

DSW joined the list of department stores struggling in a tough retail environment. The footwear retailer missed sales and earnings expectations, and lowered its outlook for the year.

But luxury homebuilder Toll Brothers reported better-than-expected earnings in the second quarter, as limited supply and strong demand continue to boost its industry.