Key Highlights

● eBay reported revenue growth and a strong margin.

● The company repurchased a large amount of its own shares.

● eBay earns most of its revenue from transaction fees.

● Amazon's results on Thursday will set the tone for e-commerce.

eBay shares climbed in extended trading on Wednesday, October 28, after the online marketplace reported revenue growth, a strong margin and hefty share repurchases.

eBay (NASDAQ:EBAY) rose after the closing bell as investors welcomed a quarterly report that combined revenue growth with a strong margin and large buybacks. The S&P 500 company's results were summarized in a closing recap, which listed the stock among the evening's gainers.

Growth Plus Capital Returns

eBay runs one of the world's oldest online marketplaces, connecting buyers and sellers in categories ranging from collectibles and trading cards to car parts and refurbished electronics. Unlike retailers that hold inventory, eBay earns most of its money from fees on transactions, which tends to support healthy margins.

The company reported revenue growth for the quarter along with a strong margin, according to the recap. It also paired those results with large share repurchases. Buybacks reduce the number of shares outstanding, which can lift earnings per share and signal management's confidence in the business.

E-Commerce in Focus

eBay's report sets up a big moment for online retail. Amazon (NASDAQ:AMZN), the largest e-commerce company, reports after the close on Thursday, October 29. Etsy (NASDAQ:ETSY), another marketplace, climbed during Wednesday's regular session after its third-quarter revenue and earnings came in ahead of estimates, and it touched a new 52-week high.

Shoppers' willingness to spend will be tested in the coming weeks as the holiday season approaches. Oil above $100 a barrel and higher borrowing costs both weigh on household budgets.

Fed and Yields

The Federal Reserve left its benchmark rate range unchanged on Wednesday in a 10-2 vote. The statement said economic activity is expanding at a strong pace and inflation remains elevated. Long-dated Treasury yields climbed, with the 10-year pushing past a key psychological threshold, its largest daily gain since late September.

The S&P 500 closed at 7,743.98, up 21.38 points, for a third straight gain. Chip stocks drove much of the advance. After the bell, Microsoft (NASDAQ:MSFT) rose on an earnings beat, while Alphabet (NASDAQ:GOOGL) slid sharply after missing estimates, weighing on overnight futures for the Nasdaq-100. eBay's gain stood out against that softer tone for tech.

What to Watch

Investors will look for detail on eBay's gross merchandise volume, its focus categories and its outlook for the holiday quarter, as well as the pace of buybacks.

Thursday, October 29, brings the advance estimate of third-quarter GDP and September PCE inflation data at 8:30 a.m. ET, offering a read on consumer spending. Mastercard (NYSE:MA) reports before the open with Merck (NYSE:MRK) and Caterpillar (NYSE:CAT), and Amazon's results after the close will set the tone for e-commerce stocks.