US stocks finished broadly higher on Wednesday after President Donald Trump indicated that a deal to resolve the long-running trade dispute with China could happen soon.
Mr Trump's remarks, in addition to a sharp increase in sales of new US homes, helped reverse an early slide for stocks.
Technology companies led the rally, which snapped a three-day losing streak for the market. Communication services stocks and companies that rely on consumer spending also notched solid gains. Health care stocks were the biggest loser.
The mid-morning release of a rough transcript of a July phone call between Mr Trump and Ukraine's president that is at the centre of a congressional impeachment inquiry into Mr Trump did not have much of an impact on the market.
That suggests traders are largely shrugging off the potential consequences the political drama might have for stocks at least for now.
"If the market really thought it was bad, it would go down and stay down, and it would be the only thing impacting the market," said Tom Martin, senior portfolio manager at Globalt Investments.
The S&P 500 index rose 18.27 points, or 0.6%, to 2,984.87. The Dow Jones Industrial Average gained 162.94 points, or 0.6%, to 26,970.71.
The Nasdaq climbed 83.76 points, or 1.1%, to 8,077.38. The Russell 2000 index of smaller companies picked up 17.07 points, or 1.1%, to 1,550.65.
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The S&P 500, Dow and Nasdaq are on track to end the third quarter with modest gains.
Stocks got off to a downbeat start on Wednesday as traders continued to weigh the implications of the House Democrats-led impeachment inquiry into Mr Trump.
The S&P 500's losses began to ease after the Commerce Department said sales of newly built US homes jumped 7.1% last month as lower interest rates helped drive sales. The report sent homebuilder shares broadly higher. KB Home gained 3%.
Stocks continued to recover after the release of the Trump phone call transcript. The market then climbed into positive territory after Mr Trump, speaking to reporters at the United Nations, said China wants "to make a deal very badly," adding that "it could happen sooner than you think".
Talks between top-level officials aimed at resolving the costly trade war are expected to take place next month.
The broader market was coming off its worst day of the month, when a weak consumer confidence report, more trade war rhetoric and the start of the impeachment inquiry rattled investors.
Some analysts expressed doubts Wednesday that the political drama unfolding in Washington will affect the market significantly.
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"Today, while the current crisis will add to equity market instability, we don't think it will lead to recession or a new bear market," Sam Stovall, chief investment strategist at CFRA, wrote in a research note.
Ryan Detrick, senior market strategist at LPL Financial, said that as long as the economy remains on firm footing, impeachment-related developments will not affect the bull market's run.
Even so, the congressional probe does add a degree of uncertainty to the market and could complicate the White House's efforts to resolve trade disputes with China and other nations.
"The issue is if impeachment ends up being a negative or a distraction, it might hurt Trump's hand in negotiating with the EU and with China," Mr Martin said.