The main U.S. stock indexes extended gains on Tuesday as more companies reported better-than-expected earnings, offering some respite to investors worried about higher inflation denting the corporate bottomline.

Toy company Hasbro Inc beat market estimates for quarterly profit, sending the toymaker's shares up 0.8%.

Shares of Halliburton rose 1.2% after the oilfield services provider posted a 41% increase in quarterly adjusted profit.[L4N2Z02BA]

"Earnings have come in better than lowered expectations," Said Paul Kim, CEO of Simplify Asset Management in New York.

"So we're not seeing the bite of tighter monetary policy and inflation impacting revenue as much as feared."

Johnson & Johnson shares lost 1.6%, reversing earlier gains. The health care giant reported profit and sales that exceeded expectations but cut its earnings outlook for the year due to a soaring U.S. currency.

A strong dollar also weighed on shares of IT hardware and services company IBM Corp, which beat quarterly revenue expectations on Monday but warned the hit from forex for the year could be about $3.5 billion.

IBM's shares fell 6.5%.

The U.S. dollar hovered just above a one-week low on Tuesday, marking its third straight day of declines as markets reduced the odds of a full percentage-point Federal Reserve rate hike this month. [USD/]

Spiraling inflation initially led markets to price in a 100-basis-point hike in interest rates at the upcoming Fed meeting later this month, until some policymakers signaled a 75-basis-point increase.

Boosting the major indexes, Apple Inc gained 2.5%, recovering almost all its declines from the previous session, when a report said the company planned on slowing hiring and spending growth next year.

Other high-growth stocks such as Tesla Inc, Microsoft Corp, Meta Platforms Inc and Amazon.com Inc were also trading higher.

In this earnings season, analysts expect aggregate year-on-year S&P 500 profit to grow 5.8%, down from the 6.8% estimate at the start of the quarter, according to Refinitiv data.

At 1:56 p.m. ET, the Dow Jones Industrial Average rose 644.72 points, or 2.07%, to 31,717.33, the S&P 500 gained 93.71 points, or 2.45%, to 3,924.56 and the Nasdaq Composite added 322.62 points, or 2.84%, to 11,682.67.

All of the 11 major S&P 500 sector indexes gained, with at least eight of them adding more than 2% each.

Boeing Co jumped 4.8% on plans by private equity firm 777 Partners to buy up to 66 more Boeing 737 MAX jets.

Netflix Inc's shares rose 4.6% ahead of its results after market close.

Advancing issues outnumbered declining ones on the NYSE by a 5.43-to-1 ratio while on the Nasdaq, a 3.97-to-1 ratio favored advancers.

The S&P 500 posted one new 52-week high and 30 new lows; the Nasdaq Composite recorded 27 new highs and 39 new lows.