Investors are getting into the holiday mood, and the latest moves on Wall Street suggest that optimism is rising. After a pause on Monday, the Dow Jones Industrial Average (^DJI 0.15%) got back on track Tuesday morning, rising more than 1% shortly after the market open.

A lot of discussion about the 2022 bear market has centered on whether the economy will fall into a recession as a result of the Federal Reserve's aggressive interest rate increases over much of the past year. Yet as some early signs of a possible peak in inflationary pressures have appeared, investors have gotten more hopeful that recovering consumers could exert enough positive force to keep the economy growing. With shares of Walmart (WMT 0.27%) and Nike (NKE -0.23%) leading the Dow forward Tuesday morning, it's evident that expectations for those businesses will be important in determining the future course of the consumer economy and the stock market.

Walmart gets a big boost

Shares of Walmart were up more than 7% following the release of its third-quarter financial report. Not only did the company do better than many had expected, but it also projected a strong holiday quarter that could help build longer-term momentum toward a full recovery.

Walmart's financial performance satisfied shareholders. Revenue of $152.8 billion for the quarter was up 8.7% year over year, even considering impacts of the strong U.S. dollar that cost the department store retailer more than a percentage point of top-line growth. Comparable sales in the U.S. were up 8.2%, with 16% e-commerce growth and a strong showing in Walmart's grocery segment. Although the company posted a loss due in part to a multi-billion-dollar settlement of the retailer's potential liability for opioid issues, adjusted earnings of $1.50 per share were better than what most of those following the stock had anticipated seeing.

Macroeconomic uncertainty remained part of Walmart's message, as executives emphasized the fact that inflation remains a key focal point among customers. Yet in many ways, inflationary pressures have played to Walmart's strengths, as some consumers who would ordinarily shop at other types of stores take steps to tighten their budgets and seek out the lower prices available at the department store giant.

Walmart also believes that its stock remains a good value, as the company implemented a new $20 billion stock repurchase program. All told, improving sentiment has now lifted Walmart's stock to within 10% of its all-time high, and further good news on the consumer front could get shares back to record levels in the near future.

Nike moves further into the metaverse

Elsewhere in retail, athletic footwear pioneer Nike saw its stock rise almost 4%. The company has had a tough 2022, but that hasn't stopped it from pursuing long-term initiatives aimed at courting young consumers.

On Monday, Nike announced that it launched  a Web3 platform to build an inclusive digital community and virtual experience for fans of the company and its products. Dubbed .Swoosh, the platform will start inviting new members to register in November. Nike then intends to launch its first digital collection next year.

The move is just one small example of how Nike has used its brand power to extend its worldwide reach. Even as currency-related headwinds and varying economic conditions in foreign markets have affected its short-term results, the athletic footwear giant still sees stronger times ahead as it works through inventory challenges and prepares for the holidays.

Strong performance from two of the Dow's top retail stocks shows that investors are getting more optimistic about the future of the economy. There's always a chance that inflation will prove more persistent than hoped, but if conditions keep improving, there's considerable room for a recovery led by consumer-oriented stocks.