(Updates to afternoon)

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Indexes up: Dow 0.57%, S&P 500 0.77%, Nasdaq 1.14%

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U.S. 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

By Stephen Culp

NEW YORK, Nov 5 (Reuters) -

U.S. stocks rebounded on Wednesday from the previous day's

selloff as jitters over inflated tech stock valuations abated

and upbeat earnings and better-than-expected economic data

fueled optimism.

A broad rally sent all three major U.S. equity indexes

higher, 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.

"T

here 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, per LSEG.

"I don't know a single strategist that sat there in late

March or early April, as tariffs are starting to hit and a

selloff started to occur, that was predicting a double-digit

return for the S&P by year-end," Pursche added.

The Dow Jones Industrial Average rose 267.14 points,

or 0.57%, to 47,352.38, the S&P 500 gained 51.67 points,

or 0.77%, to 6,823.47 and the Nasdaq Composite

climbed 266.72 points, or 1.14%, to 23,615.36.

McDonald's gained 2.6% 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. Even so, the Tinder parent's shares jumped

5.9%.

Amgen ( AMGN ) gained 7.9% in the wake of the drugmaker's

profit beat.

Bank of America ( BAC ) slipped 1.5% even though the lender

raised its profitability target.

Health insurer Humana dropped 7.4% after it reported

third-quarter results, while Johnson Controls ( JCI ), jumping

9.1%, was among the biggest gainers on the S&P 500 after its

stronger-than-expected 2026 profit forecast.

Super Micro Computer ( SMCI ) tumbled 9.5% 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.

Advancing issues outnumbered decliners by a 2.18-to-1 ratio

on the NYSE. There were 114 new highs and 106 new lows on the

NYSE.

On the Nasdaq, 2,925 stocks rose and 1,634 fell as advancing

issues outnumbered decliners by a 1.79-to-1 ratio.

The S&P 500 posted 24 new 52-week highs and 14 new lows

while the Nasdaq Composite recorded 66 new highs and 153 new

lows.