"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."

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

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.