Stocks closed broadly higher on Wall Street for the third straight day Thursday, led by solid gains in technology companies and banks.
The latest gains extend the market's turnaround from the start of the week, when stocks nosedived as the trade conflict between the U.S. and China escalated, stoking investors' fears about the fallout for the global economy and corporate profits.
Traders have since been encouraged by signals that Washington and Beijing are still planning to continue negotiations. And they've found relief in reports indicating that the U.S. is backing away from raising tariffs on auto imports from Europe and is making progress on lifting steel tariffs in North America.
The S&P 500 index rose 25.36 points, or 0.9%, to 2,876.32. The Dow Jones Industrial Average climbed 214.66 points, or 0.8%, to 25,862.68. The index was briefly up 309 points.
The Nasdaq composite gained 75.90 points, or 1%, to 7,898.05. The Russell 2000 index of small company stocks picked up 8.97 points, or 0.6%, to 1,557.24.
Major stock indexes in Europe finished higher.
The S&P 500 is now up 2.3% from its close on Monday, when the benchmark index slumped after China issued retaliatory tariffs on U.S. goods, ratcheting up tensions between the two largest economies in the world.
The market has still not recovered all its losses since early last week, when President Donald Trump turned up the heat in the trade war by threatening to hike tariffs on $200 billion worth of Chinese imports from 10% to 25%. The S&P 500 is still down about 1.9% from its close on May 6.
The market will likely remain volatile until investors can get a better sense of how the U.S. and China will resolve their trade dispute, said Liz Ann Sonders, chief investment strategist at Charles Schwab.
"Clearly, the market is at the mercy of what we're hearing on trade," she said.
Banks and other financial services companies got a boost from higher bond yields, which allow them to charge higher interest rates on loans.
The yield on the 10 year Treasury rose to 2.39% from 2.38% late Wednesday.
The higher yields followed a Commerce Department report showing that U.S. home construction rose faster than expected by economists in April.
Energy futures finished higher. Benchmark U.S. crude rose 1.4% to settle at $62.87 per barrel. Brent crude, the international standard, closed 1.2% higher at $72.62 per barrel.
Wholesale gasoline climbed 2.4% to $2.06 per gallon. Heating oil gained 1.8% to $2.12 per gallon. Natural gas added 1.5% to $2.64 per 1,000 cubic feet.
Gold fell 0.9% to $1,286.20 per ounce, silver dropped 1.8% to $14.54 per ounce and copper gained 0.2% to $2.75 per pound.
The dollar rose to 109.87 Japanese yen from 109.54 yen on Wednesday. The euro weakened to $1.1172 from $1.1204.