U.S. stocks rebounded Wednesday as jitters over inflated tech stock valuations abated and upbeat earnings and better-than-expected economic data fueled investors' risk appetite.

A broad rally sent all three major U.S. equity indexes higher on the day, with a bounce-back in tech and tech-related momentum stocks leading the charge.

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 selloff as healthy profit-taking.

"Valuation concerns are very legitimate and a 10% to 15% 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 U.S. Supreme Court raised doubts over the legality of U.S. 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 U.S. imports, but maintained 10% levies imposed after what Trump called Liberation Day on April 2. Imports of U.S. soybeans, however, will still face a 13% tariff.

ADP's National Employment Report showed private payrolls rebounded in October, increasing by 42,000.

Still, the labor market is showing signs of weakness as some sectors continue to shed jobs.

A separate report showed the U.S. services sector expanding, even as it loses jobs and contends with the highest input costs in nearly three years.

A congressional impasse has resulted in what is now the longest-ever U.S. 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% of which topped Wall Street expectations, according to LSEG data.

Analysts now predict aggregated S&P 500 earnings growth of 16.2% year-on-year for the July-September period, more than double the 8.0% 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."

According to preliminary data, the S&P 500 gained 25.08 points, or 0.36%, to end at 6,796.63 points, while the Nasdaq Composite gained 151.16 points, or 0.64%, to 23,499.80. The Dow Jones Industrial Average rose 224.31 points, or 0.48%, to 47,309.55.

McDonald's advanced 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 shares of the Tinder parent closed sharply higher.

Amgen gained in the wake of the drugmaker's profit beat.

Bank of America slipped even though the lender raised its profitability target.

Health insurer Humana slumped after it reported third-quarter results, while Johnson Controls was among the biggest gainers on the S&P 500 after its stronger-than-expected 2026 profit forecast.

Super Micro Computer tumbled in the wake of the company's disappointing results. Democrats swept the first election of Trump's second term, with the passage of California's redistricting ballot measure boosting the party's chances to regain control of the House of Representatives in next year's midterms.