Each gain was the best since 2009, the year the longest bull market on record began - and it was the first time the Dow had gained more than 1000 points in a single session.
"It might be a bit early to call an end to the correction, but it highlights how aggressive recent selling has been," Solly said.
Solly said we might not see as much of a bounce on the NZX, because it has held up better, "but improved sentiment may support some stocks that have been particularly weak recently".
On Wall Street, consumer shares paced the rally. Each member of the FAANG cohort rallied at least 6.4 per cent, while energy producers surged as crude powered past $46 a barrel.
President Donald Trump said a day earlier that the rout that took stocks down 19.8 per cent from a record provided a "tremendous opportunity to buy". Investors also welcomed Kevin Hassett's assurance that Jerome Powell's job is "100 per cent" safe. Oil's best rally since 2016 added to the equity surge.
"It was probably a pretty good retail-oriented holiday and that probably has a lot to do with what's happening today," said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group. "The thing that the Fed chairman won't be axed, that has a lot to do with everyone being happy Powell gets to keep his job and that the turmoil about this has abated for today. You have the market leaning one way or the other, and it can often do what it's doing today, which is go higher. On Monday the market leaned lower. It's an outsize move."
Stocks are looking to stop one of the most miserable Decembers on record, as a host of headwinds combined to drag down America's benchmark index. A reminder that consumers - a key part of the American economy - remain on solid footing helped soothe anxiety created by fears of a global slowdown and personnel churn in the US administration. Volume was inline with the 30-day average at this time of day.
Hassett was the latest government official to try to calm the markets after Bloomberg's report Friday that Trump asked about firing Powell. Treasury Secretary Steven Mnuchin was criticised for saying he called bank chiefs to gauge liquidity. Trump expressed confidence in Mnuchin yesterday.
Crude surged, the greenback was stronger versus its major peers and Treasuries fell. Exchanges throughout Europe remained closed for the holiday.
Elsewhere on Wednesday, Japanese equities closed higher on a wave of late buying after fluctuating throughout the day. Korean shares tumbled after a holiday, and Shanghai stocks fell for a second day. Markets in Australia and Hong Kong were closed.
West Texas Intermediate crude rebounded to trade above $44 a barrel. The offshore yuan was little changed after China released new rules promising to treat all companies equally, the latest positive step on the trade and investment front since further US and Chinese tariff hikes were paused.
"There's a lot of uncertainty in the short-term and that makes sense," Gershon Distenfeld, AllianceBernstein co-head of fixed income, said on Bloomberg TV. "We're going to have a lot of volatility. But this base case of 'the world is coming to an end' just given the fundamental data out there doesn't make any sense."
With reporting by Bloomberg.
