US stocks have rebounded as jitters over inflated tech stock valuations abated and upbeat earnings and better-than-expected economic data fuelled investors' risk appetite.
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A broad rally sent all three major US equity indexes higher on the day, with a bounce-back in tech and tech-related momentum stocks leading the charge.
But the rally lost some momentum after JPMorgan Chase chief executive Jamie Dimon told Reuters asset prices are quite high and there is always a risk of markets going down.
Technology and artificial intelligence-related shares have muscled the stock market to record-breaking highs in recent months, leading to worries of inflated valuations and prompting Wall Street executives to issue pullback warnings.
Those worries came to a head on Tuesday, when the S&P 500 and the Nasdaq posted their largest single-day percentage drops since October 10. Even so, investors viewed the sell-off as healthy profit-taking.
"Valuation concerns are very legitimate and a 10 per cent to 15 per cent short-term correction is something that should be anticipated at any time," said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.
"There is a little bit of a mentality amongst investors that if there's a pullback, it'll be short-lived and things will bounce back, therefore buy the dip and don't worry."
The US Supreme Court raised doubts over the legality of US President Trump's market-jarring tariffs in a case with global economic implications that tests the extent of his powers.
Beijing said it would lift some retaliatory tariffs on US imports, but maintained 10 per cent levies imposed after what Trump called Liberation Day on April 2. Imports of US soybeans, however, will still face a 13 per cent tariff.
ADP's National Employment Report showed private payrolls rebounded in October, increasing by 42,000.
Still, the labour market is showing signs of weakness as some sectors continue to shed jobs. A separate report showed the US services sector expanding, even as it loses jobs and contends with the highest input costs in almost three years.
A congressional impasse has resulted in what is now the longest-ever US government shutdown, which has forced investors and the data-dependent Federal Reserve to rely on private sector indicators.
Third-quarter earnings season remains in full force as it barrels toward the last stretch. So far, 379 of the companies in the S&P 500 have reported, 83 per cent of which topped Wall Street expectations, according to LSEG data.
Analysts now predict aggregated S&P 500 earnings growth of 16.2 per cent year-on-year for the July-September period, more than double the 8.0 per cent growth expectations at the beginning of the quarter, according to LSEG.
"Earnings, revenues, and guidance have been surprisingly positive throughout this earnings season," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
"That's in the face of an economy that has seen weakening job numbers, as well as tariffs and their uncertain impact."
"November and December tend to be good months for the market anyway," Tuz added. "And with these tailwinds, I don't see anything that's going to come along and turn things negative."
The Dow Jones Industrial Average rose 225.76 points, or 0.48 per cent, to 47,311.00 on Wednesday, the S&P 500 gained 24.74 points, or 0.37 per cent, at 6,796.29 and the Nasdaq Composite climbed 151.16 points, or 0.65 per cent, to 23,499.80.
McDonald's gained 2.2 per cent after the fast-food chain beat same-store sales estimates as affordable meal offers boosted demand.
Match Group's fourth-quarter revenue forecast landed shy of expectations. But the Tinder parent's shares jumped 5.2 per cent.
Amgen gained 7.8 per cent in the wake of the drugmaker's profit beat. Bank of America slipped 2.0 per cent even though the lender raised its profitability target.
Health insurer Humana dropped 6.0 per cent after it reported third-quarter results, while Johnson Controls, jumping 8.8 per cent, was among the biggest gainers on the S&P 500 after its stronger-than-expected 2026 profit forecast.
Super Micro Computer tumbled 11.3 per cent in the wake of the company's disappointing results.
Advancing issues outnumbered decliners by a 2.09-to-1 ratio on the NYSE. There were 134 new highs and 120 new lows on the NYSE.
On the Nasdaq, 3,006 stocks rose and 1,631 fell as advancing issues outnumbered decliners by a 1.84-to-1 ratio.
The S&P 500 posted 25 new 52-week highs and 16 new lows while the Nasdaq Composite recorded 77 new highs and 170 new lows.
Volume on US exchanges was 19.17 billion shares, compared with the 20.96 billion average for the full session over the last 20 trading days.
Australian Associated Press
