On Wall Street, the S&P 500 rose 1.1% to 4,345.72. The Dow Jones Industrial Average added 0.9% to 34,314.67, and the Nasdaq gained 1.3% to 14,433.83. Small company stocks also notched gains. The Russell 2000 index picked up 0.5% to 2,228.36.
The gains marked a reversal in the market’s overall trajectory in recent weeks. The S&P 500 fell 4.8% in September, its first monthly drop since January. After steadily losing ground since it set an all-time high Sept. 2, the index slipped Tuesday below its 100-day moving average of 4,354.
The market has been choppy for weeks, with inflation concerns driving up-and-down shifts for technology companies and the broader market.
Rising inflation is prompting businesses from Nike to Sherwin-Williams to temper sales forecasts and warn investors that higher costs will hurt financial results. Supply chain disruptions and delays, along with rising raw materials costs, are among some of the key problems facing companies as they try to continue recovering from the pandemic's impact.
The lingering pandemic and global supply chain problems prompted the International Monetary Fund to trim its forecast for global growth this year.
Still, Wall Street is still expecting solid corporate profit growth when the third-quarter earnings season kicks off later this month. S&P 500 companies are projected to post a 27.7% increase in earnings for the July-September quarter versus a year earlier, according to FactSet.
Facebook rose 2.1% after falling nearly 5% on Monday after a former employee told "60 Minutes" that the company has consistently chosen its own interests over the public good. The former employee, Frances Haugen, testified in front of Congress on Tuesday.
Meanwhile, Asian shares slipped in cautious trading Wednesday, shrugging off a rally on Wall Street led by technology companies and banks that erased most of the losses from the previous day's sell-off.
Japan's benchmark Nikkei 225 sank 1.3% in afternoon trading to 27,470.09. South Korea's Kospi dipped 1.4% to 2,919.87. Australia's S&P/ASX 200 shed 0.6% to 7,206.50. Hong Kong's Hang Seng was little changed inching down less than 0.1% to 24,093.07. Trading was closed in Shanghai for the Chinese national holidays.
Worries remain in Asia about ongoing coronavirus infections, although hopes are growing that economic activity will return closer to normal later this year, bouncing back from the deep downturn in 2020.
"On the risks front, China credit problems and contagion risks have certainty not abated with developer concerns still surfacing. As such, caution has not been thrown to the winds," said Tan Boon Heng of the Asia & Oceania Treasury Department at Mizuho Bank in Singapore.
Troubled real estate developer China Evergrande Group's risk of defaulting on its more than $300 billion in debt has alarmed investors already worried over the slowdown in China's growth.
Shares skidded in Japan after Prime Minister Fumio Kishida took office on Monday. Kishida has indicated he might favor a capital gains tax to improve government finances.
Prospects for the world's third largest economy remain uncertain. Fitch agency has retained a "negative outlook" for Japan, citing "downside risks to the macroeconomic and fiscal outlook from the coronavirus shock."
Shares fell in New Zealand after its central bank raised interest rates for the first time in more than seven years, removing some of the support it put in place when the coronavirus pandemic began.
The Reserve Bank raised the benchmark rate from a record low 0.25% to 0.5%. The move came despite a lockdown in Auckland due to a coronavirus outbreak.
The bank said inflation was expected to rise to 4% in the short term before easing to 2% in the medium term.
In energy trading, benchmark U.S. crude added 8 cents to $79.01 a barrel in electronic trading on the New York Mercantile Exchange. It gained $1.31 to $78.93 per barrel on Tuesday.
Brent crude, the international standard, rose 9 cents to $82.65 a barrel.
In currency trading, the U.S. dollar rose to 111.75 Japanese yen from 111.45 yen. The euro cost $1.1588, inching down from $1.1601.