Technology companies led stocks broadly higher on Wall Street Wednesday, erasing the S&P 500's losses from a day earlier.

Traders pivoted to riskier holdings as encouraging developments overseas helped alleviate investors' anxiety over the global economy. Lawmakers in Britain were seeking a less chaotic exit from the European Union and political tensions in Hong Kong eased.

The rally reversed Tuesday's losses, when disappointing U.S. manufacturing data and an escalation in the ongoing trade war between the U.S. and China led to a sell-off that ended a three-day winning streak for the market.

"It was maybe a little bit of an overreaction yesterday to the manufacturing numbers, so that's why we're having a bounce back today," said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. "We had some good news on Hong Kong today, but just in general investors have to get used to the volatility."

The S&P 500 gained 31.51 points, or 1.1%, to 2,937.78. The Dow Jones Industrial Average rose 237.45 points, or 0.9%, to 26,355.47.

The Nasdaq, which is heavily weighted with technology stocks, climbed 102.72 points, or 1.3%, to 7,976.88. The Russell 2000 index of smaller company stocks picked up 12.47 points, or 0.8%, to 1,484.76.

Even after finishing a turbulent August with a monthly loss for only the second time this year, the benchmark S&P 500 index is down less than 3% from its all-time high set in July.

Investors have been worried that the trade war and a slowing global economy could tip the U.S. into a recession. But traders set aside those concerns Wednesday, focusing instead on geopolitical developments.

In Hong Kong, the government withdrew an extradition bill that had set off three months of protests in the region. That spurred Asian stock markets to finish broadly higher. The Hang Seng in Hong Kong surged 3.9%, its best day since November. The announcement of the withdrawal came after markets closed but reports that it was in the works sent stocks higher there during regular trading hours.

Stocks in Europe also finished higher as traders welcomed a big step taken by Britain's parliament toward passing a law that could stop Prime Minister Boris Johnson's plan to pull out of the EU on Oct. 31 with or without a withdrawal agreement.

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