Analysts are predicting that the companies in the S&P 500 will report a decline in profits of about 20 percent for the three months through September
Last week the White House proposed a $1.8 trillion stimulus package, but House Speaker Nancy Pelosi had stuck to her demand for $2.2 trillion in aid.
The Dow Jones Industrial Average rose 108.10 points, or 0.38 percent, at the open to 28,533.61.
The Dow Jones Industrial Average rose 45.40 points, or 0.16 percent, at the open to 28,348.86.
The Dow Jones Industrial Average rose 142.61 points, or 0.52 percent, at the open to 27,825.42.
All three major indexes moved sharply higher after U.S. House of Representative Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin both expressed hope for a breakthrough in partisan stimulus negotiations
A strong performance in Tuesday's debate by Biden, who currently has a modest lead in betting odds and polls, might boost stocks related to global trade and renewable energy, while a perceived debate victory by Trump could benefit fossil fuel and defense companies.
Amazon.com Inc dropped 2.3% and Apple Inc fell 1.6%, making them the biggest drags on the S&P 500 and Nasdaq. Last week, the Nasdaq's losses put the index down 10% from its closing record, confirming a correction began on Sept. 2.
The S&P 500 and Nasdaq ended a choppy session lower as losses in heavyweight technology names such as Amazon.com and Apple weighed on the market and drove down MSCI's U.S.-centric benchmark index for stock performance around the world.
The market's rise was limited as Apple Inc's shares lost early gains following its rollout of a new virtual fitness service and a bundle of all its subscriptions, Apple One.
The Dow Jones Industrial Average rose 53.10 points, or 0.19 percent, at the open to 27,718.74.
Tesla Inc shares rebounded 10.92% after suffering their biggest one-day percentage drop in the prior session, while Apple Inc , Microsoft Corp and Amazon.com Inc - the top three U.S. public companies by market capitalization - each rose by at least 3%.
The U-turn in U.S. stocks, however, was already reflected in some markets, so the impact in Asia may be muted, said Rodrigo Catril, a senior FX strategist at National Australia Bank.
All eleven major S&P sectors fell in early trading, with energy and information technology stocks leading declines.
“The performance of Wall Street is going to leave a heavy residue, and most noteworthy is how the tech names dropped down quite aggressively. Investors will take a close note of that,” said Tom Piotrowski, a markets analyst at Australian broker CommSec.
Investors are also sceptical of putting in more money amid growing border tensions with China, says Paras Bothra of Ashika Stock Broking.
The Cboe Volatility Index, which for weeks had been easing toward its longer-term average price of 19.4, on Thursday jumped 7.03 points, its largest one-day rise since June 11, and ended the session at a nearly 10-week closing high of 33.60.
The moves are more muted than the 5% plunge on the tech-heavy Nasdaq overnight, or the S&P 500's 3.5% drop, which traders said was overdue given recent frothy gains.
On Wall Street, each of the three major equity indexes moved higher, but gains were led by defensive sectors such as utilities as the high-flying tech sector paused.
Value stocks - shares of economically sensitive companies trading at multiples that are usually below those found on growth names - have been among the laggards in the market’s blistering rally from its March lows.
All three major US stock indexes ended the week higher than last Friday's close, marking the fifth consecutive weekly gains for the S&P and the Nasdaq.
The Nasdaq also set an all-time closing high, its 39th year-to-date, compared with a total of 31 reached in all of 2019.
The US Fed is trying to spur inflation over the next several years in order to prevent a deflationary spiral as the global economy struggles to right itself from the COVID-19 shock.
Nasdaq clocked its 19th record closing high since early June when it confirmed its recovery from the coronavirus sell-off.
The Fed also ruled out for now more dovish monetary policy measures such as yield-curve control.