Stocks rose on Thursday, recovering some of the losses from a steep two-day selloff amid increasing expectations that the Federal Reserve will cut rates later this month.
The Dow Jones Industrials pulled out of triple-digit losses in the morning to gain 122.42 points, and close Thursday at 26,201.04.
The S&P 500 regained 23.02 points to 2,910.63
The NASDAQ Composite resuscitated 87.02 points, or 1.1%, to 7,872.27, after falling as much as 1.1%
Tech stocks led the way higher. Facebook rose 2.7% as fellow "FANG" stock such as Alphabet and Amazon gained 1% and 0.7%, respectively. Apple closed 0.9% higher.
Despite Thursday's slight gains, the major averages were headed for their third straight weekly loss. The S&P 500 is down 1.7% week to date while the Dow has lost 2.3%. The NASDAQ was headed for a 0.9% decline for the week. That could change, however, on Friday after the U.S. government releases the latest monthly jobs report.
The Institute for Supply Management said its reading on the U.S. services sector fell last month to its lowest level since August 2016. The ISM non-manufacturing index came in at 52.6 for September. Economists polled by Dow Jones expected a print of 55.3.
Earlier this week, ISM posted its weakest reading on the manufacturing sector in more than 10 years, sparking fears of an economic recession.
However, the probability of a rate cut by the Federal Reserve this month increased following the ISM's report release. Expectations for an October rate cut jumped to 93.5% from 77% on Wednesday.
The Fed is scheduled to meet at the end of the month. Last month, the central bank cut rates for the second time in 2019.
Prices for the benchmark 10-year U.S. Treasury shot sharply higher, lowering yields to 1.54% from Wednesday's 1.59%. Treasury prices and yields move in opposite directions.
Oil prices slid 52 cents to $52.12 U.S. a barrel.
Gold prices gained $5.90 to $1,513.80 U.S. an ounce.