The rose for the first time in five days on Thursday as gains in Apple led tech shares higher.
The broad index rose 0.3 percent to 2,914, snapping a four-day losing streak, as tech climbed half a percent. The Dow Jones Industrial Average, meanwhile, ended a three-day slide by rising 54.65 points to 26,439.93. The Nasdaq Composite outperformed, advancing 0.7 percent to 8,041.97.
Apple rose 2.1 percent after J.P. Morgan initiated the stock with an overweight rating. The analyst sees strong growth for Apple's services offerings, noting the company is "transforming from a hardware company to a services company faster than investors had expected."
Amazon, meanwhile, gained 1.9 percent after Stifel hiked its price target on the stock to $2,525, implying a near 30 percent surge from Wednesday's close. "The company is investing in a number of initiatives, including Prime, AWS, India, logistics, video content, and Alexa, which will limit the opportunity for near-term margin expansion," Stifel said. This is now the most bullish Wall Street forecast on the stock.
Facebook, Alphabet and Twitter also closed higher, lifting the broader tech space and the overall equity market.
"This is a case of the strong leading the market again," said Marc Chaikin, CEO of Chaikin Analytics. "Heading into year-end, the stocks that initially led us higher earlier in the year will be the ones to do so once again."
Thursday's gains come as investors digested the Federal Reserve's latest decision on monetary policy. The central bank raised rates by 25 basis points on Wednesday, its third rate hike of the year. The Fed also removed the word "accommodative" from its policy statement.
"What this tells us is they will continue to gradually raise rates as they've told us they would," said Collin Martin, director of fixed income at the Schwab Center for Financial Research. "There was a lot of build-up to this meeting but we think it was much ado about nothing."
Equities closed lower on Wednesday after the decision as a decline in Treasury yield dragged down bank shares. Banks fell again on Thursday, with J.P. Morgan Chase, Goldman Sachs and Bank of America all sliding.
Expectations for a rate hike in December also increased after the Fed's announcement.
"I think this made it pretty clear we'll probably get a fourth rate hike but we still have to look at trade talks and the midterms and see what happens," said Simona Mocuta, senior economist at State Street Global Advisors.
Meanwhile, trade tensions between the U.S. and China continue to escalate. On Wednesday, President Donald Trump accused China of intending to interfere in November's congressional elections. He added, without providing evidence, that Beijing didn't want the Republican party to perform well. This prompted an immediate rejection from the Chinese government, which said it didn't intrude on another country's domestic matters.
Trump also criticized Canada for the slow pace of discussions concerning the overhaul of NAFTA. The president said he had recently vetoed Prime Minister Justin Trudeau's invitation for a one-on-one meeting — a claim that prompted a spokesman of Trudeau's government to state that no such meeting had been requested. Trump did agree, however, to start trade talks with Japan.
To boot, a meeting between Trump and Deputy Attorney General Rod Rosenstein scheduled for Thursday was delayed until next week. Reports earlier this week raised concern about Rosenstein's future in the administration and rattled investors.