The tech-heavy Nasdaq gained ground after quarterly results from SpaceX and Super Micro Computer improved appetite for AI-linked stocks, while Netflix slipped as its forecast failed to impress.
Elon Musk's rocket and space technology firm rose 10.7 per cent after he said on Tuesday that a merger of SpaceX and Tesla would be "a good idea".
SpaceX also posted its first profit as a public company. Tesla shares were up 3.7 per cent.
Super Micro jumped 12 per cent to the top of the S&P 500 after the AI server maker forecast quarterly revenue and profit margin above Wall Street estimates, signalling that AI demand remained resilient.
Peers HPE and Dell rose 3 per cent and 5 per cent, respectively.
Investors drew comfort from the reports as concerns over the profitability of the AI build-out triggered a selloff in AI-linked stocks last week, with data centre operator CoreWeave at the centre of the storm.
Its shares were down 2.4 per cent, suggesting lingering caution in the sector.
"At this stage, it's important to focus on what impacts the bottom line," Adam Sarhan, director at MarketTerminal.com said.
"Corporate earnings matter. Inflation matters because it influences what the Fed may do next.
"If the economy continues to grow without major headwinds, that supports higher earnings.
"In that environment, a lack of bad news becomes good news because it improves the outlook for corporate profits."
At 9:54 am ET, the Dow Jones Industrial Average rose 90.86 points, or 0.17 per cent, to 52,586.74, the S&P 500 gained 18.12 points, or 0.23 per cent, to 7730.06 and the Nasdaq Composite gained 147.79 points, or 0.56 per cent, to 26,572.61.
The S&P 500 information technology sector rose 0.9 per cent, lifting the benchmark index, as most chip stocks rebounded.
The Philadelphia SE Semiconductor index was up 1.2 per cent. The index has had a volatile month so far, during which it declined for eight consecutive sessions, marking its longest losing streak in 18 years.
The overall rise on the S&P 500 was contained by a 1 per cent drop in communication services stocks. They were dragged down by Netflix, down 2.5 per cent, after the streaming giant issued a weaker-than-expected forecast for its fourth-quarter profit.
Investors are scrutinising corporate earnings, especially from AI-aligned companies, for clues on whether the AI spending cycle is sustainable and the impact from rising oil prices.
Meta and Tesla are scheduled to report after markets close.
Meanwhile, oil prices remained elevated, with Brent crude futures trading near $US110 a barrel.
Data last week confirmed that price pressures were seeping into the US economy and had broadened beyond energy products, supporting the case for another interest rate hike by the Federal Reserve.
However, markets largely expect the central bank to remain on hold.
Among others, AT&T fell about 4.4 per cent despite beating third-quarter revenue and profit estimates.
Abbott Laboratories fell 2.6 per cent after the medical device maker cut its 2026 sales growth forecast.
Advancing issues outnumbered decliners by a 2.06-to-1 ratio on the NYSE and by a 1.97-to-1 ratio on the Nasdaq.
The S&P 500 posted 10 new 52-week highs and one new low, while the Nasdaq Composite recorded 26 new highs and 75 new lows.