Stocks faded in late-day trading, but finished mostly higher.
Technology companies and retailers led the rebound. The S&P 500 and Nasdaq both saw gains of under one percent, while the Dow finished flat. A sharp drop on Tuesday erased 2018 gains for all three indexes.
Shares of big tech companies have fallen sharply of late amid worries over slowing U.S. and global economic growth, trade tensions and the potential impact of federal regulation. Apple's market value has dropped by $264 billion since early October, and Amazon has fallen by $251 billion since early September. Since late July, Facebook has lost $241 billion and Alphabet is down by $169 billion.
That's $925 billion in value lost by just those four companies, more than any S&P 500 company is worth. Apple is the most valuable company on the index and is currently worth about $839 billion.
Slower growth and profits
Alec Young, managing director of global markets research at FTSE Russell, said the market has tumbled this autumn because growth in the global economy and in company profits is slowing down, and investors are worried that the situation will get worse.
Young said Wall Street essentially has a two-item wish list for the holidays: a general trade agreement between the U.S. and China, and a sign the Fed will raise interest rates at a more gradual clip. Presidents Donald Trump and Xi Jinping are scheduled to discuss the trade situation at a Group of 20 summit at the end of this month. If those things transpire, he said, the stock market will settle down.
"All they have to do is agree on a high-level framework that can delay the increase in the tariffs," Young said. "If the Fed is more dovish and we get some positive news on China, we can have a solid end to the year."
Mixed messages on trade
Still, analysts question if the world's two largest economies can ease tensions. New national security regulations proposed by the Trump administration, which could limit exports of high-tech products in fields like quantum computing, machine learning and artificial intelligence, have weighed heavily on the technology sector.
"Market sentiment next week will be driven by the tone of the trade negotiations between the U.S. and China ahead of the proposed meeting between Presidents Trump and Xi at the G20 summit at the end of this month," Paul Ashworth of Capital Economics, said in a note. "While Trump has appeared confident that a deal is in the making, key members of his administration, including last week Vice President Pence, have taken a much tougher line."
A 21-nation summit in Papua New Guinea, which ended without a final communique, has put the trade dispute between the U.S. and China in the spotlight. Draft versions of the communique showed that the U.S. wanted strong language against what it says are unfair Chinese trade practices, while China wanted clear opposition to protectionism and unilateralism.