A late burst of buying erased steep earlier losses on Wall Street on Tuesday.
The Dow Jones industrial average bounced back from a 360-point loss and closed 15 points higher, or 0.1%, at 31,537.
The S&P 500 reversed a 1.8% loss and closed the day 0.1% higher, at 3,881.
The Nasdaq composite dipped 0.5%, to 13,465, after falling as much as 3.9% earlier.
The reversal came after after reassuring comments from Federal Reserve Chairman Jerome Powell on inflation and the outlook for growth spurred traders to buy the dip.
Facebook, Disney, Netflix and other communications stocks helped drive the comeback. Early drops in Big Tech companies like Apple, Amazon and Microsoft moderated as the day went on.
Tesla, which joined the S&P 500 at the end of last year, ended down 2.2% after being down as much as 13.4%. Bond yields held near their highest level in a year.
Powell signaled the Federal Reserve was nowhere close to pulling back on its support for the economy. Airlines, lodging companies and cyclical shares set to benefit from the end of pandemic lockdowns outperformed.
So-called growth shares are having their worst month against value counterparts in more than two decades as vaccination campaigns gather pace and bond yields hover near a one-year high. Bets on faster growth have pushed the gap between 5- and 30-year yields to the highest level in more than six years.
As Powell reassured investors on stimulus, he voiced expectations for a return to more normal, improved activity later this year and said that higher bond yields reflected economic optimism, not inflation fears. That helped fuel a return of the buy-the-dip mentality that has limited equity drawdowns in recent months, with investors betting on a global economic recovery spurred by vaccines and U.S. spending.
“There was something in there for everyone today,” Leo Grohowski, chief investment officer at BNY Mellon Wealth Management, said in a Bloomberg TV interview. “Powell did recognize medium-term improvement in the economy but I think laid to rest some percolating inflation fears.”