U.S. stocks rallied Wednesday, clawing back losses from earlier in the week, as traders cheered better-than-expected economic data that helped allay recession fears.
The Dow Jones Industrial Average rose 416.33 points, or 1.29%, to 32,812.50. The S&P 500 gained 1.56% to 4,155.17, hitting its highest level since June and wiping out losses from earlier in the week. The Nasdaq Composite increased 2.59% to 12,668.16, boosted by rising tech stocks.
A surprise rebound in July services PMI helped investors shake off worries that the U.S. has already fallen into a recession, sending traders back to beaten-down tech stocks. The index released Wednesday ended three months of declines. Data on durable goods orders and manufacturing in June were also better than expected.
Comments from St. Louis Federal Reserve President James Bullard also boosted sentiment. He told CNBC Wednesday morning that he doesn't think the U.S. is currently in a recession, and that rate hikes to tame high inflation will continue.
"As the chair said, we're not in recession right now," Bullard said during a live "Squawk Box" interview. "With all the job growth in the first half of the year, it's hard to say that there was a recession."
Earnings season continued, giving investors hope that the market can recover and potentially start a new bull market as opposed to a bear rally. The S&P 500 is up about 14% from its recent intraday low in June, and the Nasdaq is at levels not seen since May.
Traders shook off anxiety that House Speaker Nancy Pelosi's visit to Taiwan could further strain already tense U.S.-China relations. China had spent weeks warning her not to make the trip.