Stocks rallied on Wednesday, recovering from losses earlier in the week, as market participants were encouraged by upbeat economic data from the services sector. The Dow Jones Industrial Average gained more than 400 points, while the S&P 500 Index and Nasdaq Composite were 1.6% and 2.6% higher, respectively.

Wednesday's session followed a two-day losing streak for Wall Street as investors weighed concerns that House Speaker Nancy Pelosi's visit to Taiwan could further strain already tense relations between the United States and China.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): +1.56% or +63.97 points to 4,155.17

Dow Jones Industrial Average (DIA  ): +1.29% or +416.33 points to 32,812.50

Nasdaq Composite Index (QQQ  ): +2.59% or +319.40 points to 12,668.16

Stocks were boosted by a surprise rebound in July non-manufacturing price managers' index (PMI) during the session, with the index ending three months of declines--signaling that the U.S. may not be in a recession at this time as many have speculated.

"The U.S. manufacturing sector continues expanding - though slightly less so in July - as new order rates continue to contract, supplier deliveries improve and prices soften to acceptable levels," said Timothy Fiore, chair of the Institute for Supply Management Manufacturing Business Survey Committee, in a press statement. "Companies continue to hire at strong rates, with few indications of layoffs, hiring freezes or headcount reduction through attrition."

For commodities, OPEC and its allies agreed to raise oil outputs by 100,000 barrels per day following calls from the U.S. for more supply. The increase, equivalent to 86 seconds of global oil demand, is expected to have little impact on prices. West Texas Intermediate (USO  ) crude futures reversed earlier highs, settling down 2% at $92.50 per barrel, while international benchmark Brent Crude (BNO  ) settled down 3.7% at $96.78 a barrel.

Market participants were also met with another large wave of corporate earnings on Wednesday. Highlights include Robinhood (HOOD  ) rallying over 11% higher after the brokerage said it would lay off nearly a quarter of its staff in the wake of its sixth straight quarterly loss.

Shares of CVS Health (CVS  ) also gained after the drugstore chain lifted its full year guidance after beating earnings estimates. Meanwhile, Starbucks (SBUX  ) rose higher after the coffee giant beat estimates despite inflationary pressures causing consumers to change their habits at other chains like McDonald's (MCD  ) and Chipotle (CMG  ).

Meanwhile, Advanced Micro Devices (AMD  ) slipped lower on Wednesday after the chipmaker lowered its guidance for its PC market as demand begins to cool following a huge uptick at the start of the coronavirus pandemic.

"We have taken a more conservative outlook on the PC business," AMD CEO Lisa Su said during an earnings call late Tuesday. "So a quarter ago, we would have thought that the PC business would be down, let's call it high-single digits. And our current view of the PC business is that it will be down, let's call it mid-teens."

Looking ahead, investors are in for more earnings from companies including Alibaba (BABA  ), Eli Lilly and Company (LLY  ) and ConocoPhillips (COP  ) on Thursday. Traders also also anticipating July's jobs report that is due out on Friday.