Stocks jumped on Wednesday, bouncing back from the prior day's sharp fall, after minutes from the Federal Reserve's last meeting indicated the central bankers were not likely to raise interest rates in the near future.
The Dow Jones Industrial Average closed unofficially 158 points, or almost 1 percent, higher, the S&P 500 rose 15 points and the Nasdaq added 34 points.
"The conversation is clearly shifting from this unprecedented accommodation to policy firming. For equity markets, this is a positive signal, because the economic momentum is more upbeat, but at the same time tightening is not imminent," said Anastasia Amoroso, a Houston-based global market strategist at J.P. Morgan Funds.
The central bank last month trimmed its monthly asset buying to $45 billion, its fourth consecutive $10 billion reduction. Fed officials also said the economy was picking up steam and the labor market improving
Tuesday's sell-off came after one Federal Reserve official said rate hikes might come sooner than expected.
Also rebounding after its recent battering, the Russell 2000 climbed 0.6 percent, but the gauge of small companies still remained roughly 9 percent from its all-time high.
"I'm actually somewhat gratified to see the Russell 2000 get hammered; it's so expensive, and I don't like to see that amount of speculation going on in the market, so I would like to see it cool off. A 10 to 15 percent correction sets it on a more stable glide path," said Jack Ablin, chief investment officer at BMO Private Bank.
Tiffany shares climbed 9 percent after the high-end jewelry posted quarterly profit that topped expectations; Netflix gained 5 percent after saying it would broaden its online-video offerings in Europe.
Target gained after the discount retailer reported a 0.3 percent decline in U.S. sales, less than the drop expected by analysts.
The dollar held steady against the currencies of major U.S. trading partners, while dollar denominated commodities were mixed, with crude futures rising $1.74, or 1.7 percent, to $104.07 a barrel, a one-month high, and gold futures losing $6.50 to $1,288.10 an ounce.
The 10-year Treasury yield used in determining mortgage rates and other consumer loans rose 2 basis points to 2.535 percent.