US 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 US 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 percent to 15 percent 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."

ADP's National Employment Report showed private payrolls rebounded in October, increasing by 42,000.

Still, the labour market is showing signs of weakness as some sectors continue to shed jobs.

A separate report showed the US services sector expanding, even as it loses jobs and contends with the highest input costs in nearly three years.

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 percent of which topped Wall Street expectations, according to LSEG data.

Analysts now predict aggregated S&P 500 earnings growth of 16.2 percent year-on-year for the July-September period, more than double the 8.0 percent 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."

The Dow Jones Industrial Average rose 0.5 percent to 47,311, the S&P 500 gained 24 0.4 percent to 6,796 and the Nasdaq Composite climbed 0.7 percent, to 23,499. (Reuters)