US stocks surge as investors prepare for the Fed to slow the pace of rate hikes

• US stocks surged on Tuesday as investors prepare for a possible December slowdown in Fed interest rate hikes.
• Market consensus currently expects a rate hike of just 50 basis points at the December meeting.
• Mixed retail earnings showed pockets of strength in the consumer and broader US economy.

US stocks surged on Tuesday as investors prepare for a potential slowdown in interest rate hikes from the Federal Reserve.

Current market consensus expects a rate hike of just 50 basis points at the December Fed meeting, according to the CME FedWatch Tool, with an assigned 75% probability. Backing that view up is Fed president Loretta Mester, who said in a Monday interview that she supports a smaller rate hike at the upcoming FOMC meeting compared to the central bank's run of four consecutive 75 basis-point rate hikes.

This year's drastic interest rate increases have yet to slow down the consumer, based on solid earnings reports from retailers on Tuesday. Both Best Buy and DICK's Sporting Goods reported better-than-expected results and raised their full-year outlook. Both stocks surged about 10% in Tuesday trades.

Here's where US indexes stood at the 4:00 p.m. ET close on Tuesday:

• S&P 500: 4,003.58, up 1.36%
• Dow Jones Industrial Average: 34,098.10, up 1.18% (397.82 points)
• Nasdaq Composite: 11,174.41, up1.36%

Here's what else is happening this morning:

• Crypto brokerage Genesis is warning potential investors it may need to file for bankruptcy protection if it fails to raise fresh funding for its lending unit.
• Tesla's market capitalization has plunged by close to $700 billion from its peak a year ago — more than the individual market value of all but a handful of America's public companies.
• Carl Icahn started shorting GameStop as individual investors piled into meme stocks and still holds a significant position in the video-game retailer.
• Ryan Cohen has explained his contrarian GameStop bet and underscored the difficulty of revitalizing the video-game retailer in a recent interview.
• Shares of Manchester United jumped 18% to a two-month high Tuesday after Sky News said the UK soccer club may be put up for sale by the family that's owned the team for 17 years.
• Lawyers for FTX said during the crypto exchange's first bankruptcy hearing Tuesday that they expect "millions" of creditors, signaling that its collapse has a much wider scope than initially thought.

In commodities, bonds and crypto:

• West Texas Intermediate crude oil jumped 1.35% to $81.12 per barrel. Brent crude, oil's international benchmark, rose 1.15% to $88.46.
• Gold was up just .02% to $1,739.90 per ounce.
• The yield on the 10-year Treasury fell six basis points to 3.77%.
• Bitcoin rose 2.13% to $16,134, while ether jumped 2.45% to $1,126.