Stocks moved higher on Tuesday, Aug. 22, after a hawkish speech from the president set off defense names.

The Dow Jones Industrial Average was up 0.58%, the S&P 500 added 0.63%, and the Nasdaq gained 0.9%.

Defense stocks Boeing Co. (BA - Get Report) , General Dynamics Corp. (GD - Get Report) , Northrup Grumman Corp. (NOC) and Lockheed Martin Corp. (LMT - Get Report) were higher after President Donald Trump outlined his plans for the long-running conflict in Afghanistan. In a prime-time address Monday evening, Trump promised to "change dramatically" the U.S. approach to the war but was scant on details on what the changes will be. Trump acknowledged his past calls for withdrawing entirely from Afghanistan but said that after much consideration he had decided to stay in and "fight to win."

President Trump addresses soldiers on Monday night.
President Trump addresses soldiers on Monday night.

He targeted Afghanistan as well as Pakistan for what he said has been their roles in also harboring terrorists and called on allies and partners to protect shared interests in the Middle East and around the globe.

"In Afghanistan and Pakistan, America's interests are clear: we must stop the re-emergence of safe havens that enable terrorists to threaten America; and we must prevent nuclear weapons and materials from coming into the hands of terrorists and being used against us," Trump said.

The SPDR S&P Aerospace & Defense ETF (XAR - Get Report) had risen 26% since the close on election day. That compares with a 13.5% gain for the S&P 500.

Boeing and Northrop were also higher after being awarded multi-million dollar Air Force contracts as part of the U.S.'s planned upgrade of its nuclear arsenal. Boeing was awarded a $349 million contract and Northrop a $329 million contract. Both will work to update the technology and potentially replace missiles dating back to the 70s. In 2020, one will be chosen to work on the country's intercontinental ballistic missile system. 

BHP Billiton Ltd. (BHP)  gave rise to materials stocks after announcing that it will sell its U.S. shale oil unit as it "actively" pursues its options for its "non-core" operations. The oil company also reported a five-fold increase in fiscal 2017 profit as oil and commodities markets stabilized. BHP swung to per-share earnings of $1.10 compared with a loss of $1.20 a share a year earlier. Analysts anticipated earnings of $1.35.

Materials stocks were the best performers on markets Tuesday. Rio Tinto plc (RIO) , Dow Chemical Co. (DOW) , Vale SA (VALE - Get Report) , and Praxair Inc. (PX) were higher, while the Materials Select Sector SPDR ETF (XLB - Get Report) increased 1%. 

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Federal Reserve Chair Janet Yellen draws focus later in the week as the September meeting of the Federal Open Market Committee draws closer. Yellen and her European counterpart Mario Draghi, European Central Bank president, will speak at the annual Economic Policy Symposium in Jackson Hole, Wyoming. The highly anticipated yearly event stretches from Thursday, Aug. 24, to Saturday, Aug. 26. 

Investors largely expect the Fed to begin unwinding its balance sheet in September, a move the central bank had previously said it would implement "relatively soon," provided the economy expands as expected. Paring the central bank's sizable assets would likely tighten monetary conditions in the same way an interest-rate hike would. Another rate increase is not expected until December at the earliest.

However, weak inflation trends could delay the Fed's timing. On top of that, a number of Fed members have said that even with a series of interest rate hikes forecast over the next 18 months, the long-term federal funds rate will likely remain below historical averages.

"The debate that they and other central banks should be having at Jackson Hole is how to deal with future crises," said Aberdeen Standard Investments' Luke Bartholomew. "The reality is that the conventional tools that they've used in the past simply won't be as effective in the future with interest rates likely to be permanently lower. This might well lead to debates about whether to raise the inflation target or change the way those targets work."

Crude oil prices fell on Tuesday, though not as sharply as a decline a day earlier. Prices slumped nearly 2% on Monday on concerns over Organization of Petroleum Exporting Countries' compliance with a production cut agreement. Compliance with previously agreed upon output restrictions reached its lowest level of 2017 in July.

West Texas Intermediate crude was down 0.2% to $47.24 a barrel.  

DSW Inc. (DSW)  roared more than 21% higher on Tuesday after reporting its first comparable-store sales growth since 2015. Same-store sales increased 0.6%, far better than an anticipated drop of 2%. Overall sales increased 3.3% to $680.4 million, coming in above consensus of $666 million. Earnings of 38 cents a share also topped estimates. 

In a statement, CEO Roger Rawlins said, "The current retail consolidation provides significant opportunity to acquire market share, and in the next 12 months we will unveil several exciting new initiatives that will inspire emotional loyalty with the DSW brand."

Toll Brothers Inc. (TOL - Get Report) declined by 1.1% after quarterly sales fell short of estimates. Revenue surged 18.1% to $1.5 billion, though came in $10 million below estimates. Earnings of 87 cents a share beat by 18 cents. The homebuilder said deliveries increased 26% in the fiscal third quarter. 

More than 90% of S&P 500 companies have reported earnings so far this season. Of those, roughly 74% have exceeded earnings estimates, above the historical average of 64%, according to Thomson Reuters data. More than 68% have topped revenue consensus, also above an average of 59%.

Updated 9:41 a.m. ET, Tuesday, Aug. 22.