Both the Dow Jones Industrial Average and the S&P 500 were recently flirting with bear territory.
Wednesday's gains pulled the S&P 500 back somewhat from the brink of a bear market, where it finished after a shortened trading session Monday.
T jumped 3.14 percent, led by Amazon, after a Mastercard report showed USA holiday sales were the strongest in six years.
Buying slowed in early December in part because an unusually early Thanksgiving made it harder for retailers to sustain sales through the entire holiday shopping period, analysts and consultants said.
Retailers gained, with the S&P 500 retailers sub-index.SPXRT jumping 1.75 percent, after a Mastercard report showed US holiday sales were the strongest in six years. A further stumble would have marked the end to the longest bull market for stocks in modern history after almost 10 years.
Fears about slowing economic growth have been exacerbated by a series of unsettling moves from Washington in recent days. This was decided last week, to raise the key interest rate. JPMorgan Chase rose 1.1 percent to $97.04. "The concerns are government shutdown, the economy, the President - what time is he going to tweet out about Federal Reserve", said Larry Benedict, founder of the Opportunistic Trader in Boca Raton, Florida.
Advancing issues outnumbered declining ones on the NYSE by a 4.84-to-1 ratio; on Nasdaq, a 3.80-to-1 ratio favoured advancers.
Technology stocks in the likes of Amazon have recorded strong daily gains possibly due to the oversold conditions the market demonstrated.
Elsewhere, U.S. home price growth slowed in October, a likely effect of higher mortgage rates having worsened affordability and causing sales to fall.
Former Premier League Star Reveals The Club Better Than Liverpool!
We smelled it a little bit previous year how it could be. "The other teams, you can see the challenge". Liverpool are in form, they are doing really well and it will be a hard game for us.
U.S. 2018 holiday sales rose 5.1 percent from a year ago to over $850 billion, the strongest gain in six years, according to a Mastercard report. Credit card company Visa climbed 7 percent, and Mastercard was up 6.7 percent. Newmont was the S&P 500's biggest gainer on Monday after gold prices rose. Government data showed profit for companies in steel, construction materials, oil, chemicals and equipment manufacturing declined 1.8 percent from a year earlier, a reverse from October's 3.6 percent gain.
The pickup in oil prices helped boost energy stocks.
"This call was absolutely unnecessary and in terms of their ability to communicate to the markets, they're losing it", Frank Troise, managing director at SoHo Capital, told CNBC's "Squawk Box" on Wednesday.
The Nasdaq is down 323.90 points, or 4.7 percent.
A headline appeared on a television screen on the floor of the New York Stock Exchange, Wednesday.
Oil plunged. Brent crude dropped 2.1% to $54.11 per barrel.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.79 percent from 2.75 percent late Monday.
CURRENCY: The dollar declined to 110.58 yen from Thursday's 111.01 yen. Copper fell 1.2 percent to $2.67 a pound. The euro weakened to $1.1387 from $1.1404. The German DAX slid 2.4 percent, while the Nikkei 225 index rebounded 3.9 percent.
All three major indexes were on pace to snap a four-day losing streak. Shares fell in Taiwan, Singapore and Indonesia but rose in Thailand. Hong Kong's Hang Seng advanced 0.4 per cent to 25,582.53 and Seoul's Kospi added 0.8 per cent to 2,044.18.