Fundstrat's Tom Lee called Nvidia's earnings release a "clearing event" for the stock market and that investors' "animal spirits" are rising.

"There were some warning signs from Target, but if you look at personal income and retail sales, they have been strong all year," said Peter Cardillo, chief market economist at Spartan Capital Securities, in an interview. "That suggests the consumer has buying power."

Nvidia helped pulled U.S. stock indexes higher on Tuesday after they stumbled in the morning on worries about escalations in the Russia-Ukraine war. The S&P 500 rose 0.4% after erasing an early drop of 0.

Target’s stock was down more than 20% in afternoon trading, compared with a 0.6% decline for the S&P 500 index, according to FactSet data, at last check. The S&P 500’s consumer-staples sector was slumping 0.4% on Wednesday afternoon.

In overseas markets, Europe's Stoxx 600 pared gains following the PMI data and was last marked 0.3% higher in midday Frankfurt trading. Britain's FTSE 100, meanwhile, rose 0.74% as the pound fell to a six-month low of 1.2521 against the surging U.S. dollar.

Stocks closed higher on Wall Street, giving the market its fifth gain in a row and notching another record high for the Dow Jones Industrial Average.