Market Volatility Subsides Following Tuesday's Surge In Stocks

U.S. markets recorded sharp gains on Tuesday, with the S&P 500 notching the highest close since June 9.

All the major sectors in the S&P 500 settled higher on Tuesday, with industrials and communication services stocks leading the gains. The Dow Jones climbed 754.44 points to 31,827.05, while the S&P 500 added 2.76% to 3,936.69 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) dropped around 4% to 24.29 on Wednesday.

Market sentiment was boosted by upbeat earnings results from several companies, despite stronger US dollar weighing on results of some firms.

Shares of Halliburton Company HAL gained over 2% on Tuesday after reporting a 41% surge in adjusted profit for the latest quarter. Hasbro Inc HAS also reported quarterly profit that came in above market expectations.

Johnson & Johnson JNJ announced upbeat financial results, while Truist Financial Corporation TFC also topped market expectations for earnings.

Shares of International Business Machines Corporation IBM dropped more than 5% on Tuesday after the tech company reduced its guidance for cash flow, citing strength in the greenback.

Investors are now awaiting earnings results from Abbott Laboratories ABT, Lithia Motors, Inc. LAD and Tesla, Inc. TSLA.

Data on existing home sales for June will be released at 10:00 a.m. ET. Existing home sales have slowed to an annualized rate of 5.41 million in May, with analysts expecting a slight drop to 5.395 million for June.