Though it seemed improbable at the close of trading on Monday, U.S. benchmarks are now up on the week.
Sentiment has been boosted by a strong showing overnight in Asian markets and much better than expected US gross domestic product figures.
The U.S. economy grew at an annualised rate of 3.7% in the second quarter, a hefty upward revision of the original estimate of growth of 2.3%.
"Today's strong revision to US GDP made the Fed's job even harder when they reconvene for September's meeting, which has all but been written off as a source of a rate hike given this week's volatility," suggested Joshua Mahony, a market analyst at spread betting firm IG.
"Contradictory statements from Fed members has [sic] muddied the picture as much as the data, but the size of today's GDP reading has done enough to revive expectations of a hike in September for just the second time in as many weeks.
"Fed funds futures have shown an implied probability of 28% that September will see rates move, roughly half that of the December meeting, which has a 53% chance of a rate hike. A mixture of imported deflation driven by a cheaper yuan, coupled with the global financial markets crash means that traders now expect the traditionally risk averse Fed will choose to hold fire for now and I would agree that a 2015 hike looks as unlikely as ever," Mahony declared.
In other economic news, first time jobless claims eased by 6,000 to 271,000 last week.
All of which contributed to the Dow Jones average being up 359 points, or 2.2%, in lunchtime trading and the S&P rising 47 points, or 2.4%. The tech-heavy Nasdaq topped the pair, rising 117 points, or 2.5%.
Leading the advance was Freeport McMoRan (NYSE:FCX), which soared 29% after it slashed its capital expenditure budget.
Up-market electric car maker Tesla Motors (NASDAQ:TSLA) put its foot down, up US$18.53 at US$243.18, after the Consumer Reports web site gave the 2015 Tesla Model S - a snip at no less than US$75,000 - an improbably 103 out of 100 in a test score.
St Jude Medical (NYSE:STJ) remained wanted, advancing 4.8% on reports in the Financial Times that Abbott Laboratories (NYSE:ABT) is mulling a bid.
Abbott, up 4.1%, refuted the FT's claims.
Expensive jeweler Tiffany (NYSE:TIF) failed to sparkle with its quarterly earnings report, and drifted 1.65 lower.
Further down the retail value chain Dollar General (NYSE:DG.) was also friendless after its trading update, sliding 3.9%.
Net income rose to $282.3mln, or $0.95 per share, for the three months ended July 31, from $251.3mln, or $0.83 per share, a year earlier; that topped the $0.94 average estimate of 26 analysts polled by Capital IQ, but the shares still retreated to US$74.30 from US$76.71 overnight.
Investors tucked into spreads and preserves maker J.M.Smucker (NYSE:SJM) after its earnings update.
The maker of Smucker's jams and Jif peanut butter reported a better-than-expected 17.6% increase in fiscal first-quarter earnings, helped by strong sales in its U.S. coffee business, pushing the shares 6.2% higher at US$115.92.