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US economy adds more private jobs in October than expected

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Supreme Court questions legality of Trump tariffs

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McDonald's, Amgen ( AMGN ), Match Group's ( MTCH ) shares rise after results

(Updates to market close)

By Stephen Culp

NEW YORK, Nov 5 (Reuters) -

U.S. stocks rebounded on 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 ( MTCH ) fourth-quarter revenue forecast

landed shy of expectations, but shares of the Tinder parent

closed sharply higher.

Amgen ( AMGN ) gained in the wake of the drugmaker's profit

beat.

Bank of America ( BAC ) slipped even though the lender

raised its profitability target.

Health insurer Humana slumped after it reported

third-quarter results, while Johnson Controls ( JCI ) was among

the biggest gainers on the S&P 500 after its

stronger-than-expected 2026 profit forecast.

Super Micro Computer ( SMCI ) 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.