Microsoft, Meta Platforms and Nvidia were the biggest boosts to the S&P 500 index, as the benchmark 10-year Treasury note yield held near 4%and a $37 billion auction of the notes drew above-average demand.

Communication services was the best performing of the 11 major S&P sectors, lifted by a roughly 4% rise in Meta Platforms' stock to the highest level since September 2021, after Mizuho raised its price target to $470 from $400.

Nvidia hit a record high after fellow chipmaker TSMC beat fourth-quarter revenue expectations.

After ending 2023 with a strong rally, stocks have struggled to find upward momentum, with the S&P 500 barely positive on the year, as mixed economic data and comments from Federal Reserve officials have led investors to dial back expectations for the timing and size of any rate cuts from the central bank this year.

"What the market is doing, it's reassessing its 2024 expectations in terms of earnings and in terms of interest rates, and really looking to justify the surge in prices that we saw in November and December," said Sam Stovall, chief investment strategist at CFRA Research in New York.

"It's sort of a good sign that the market is treading water early in the year because it implies that investors really don't want to miss out on anything else that could be good."

According to preliminary data, the S&P 500 gained 26.95 points, or 0.57%, to end at 4,783.45 points, while the Nasdaq Composite gained 111.94 points, or 0.75%, to 14,969.65. The Dow Jones Industrial Average rose 170.57 points, or 0.45%, to 37,695.73.

The focus will turn to the December consumer and producer inflation reports, due on Thursday and Friday, respectively, which could help determine the monetary policy path for the central bank.

Federal Reserve Bank of New York President John Williams said on Wednesday that it is still too soon to call for rate cuts as the central bank still has some distance to go on getting inflation back to its 2% target.

Market participants have scaled back expectations to a 67.6% chance for at least a 25-basis-point rate cut in March, according to CME's FedWatch Tool.

On Friday, banking giants JPMorgan Chase, Bank of America, Citigroup and Wells Fargo are expected to report lower fourth-quarter profits.

Crypto stocks including Coinbase and Riot Platforms each declined after the U.S. securities regulator said a hacked social media message was posted on its account regarding the eagerly awaited approval of exchange traded funds (ETFs).

The stocks barely reacted to a notice from CBOE that several spot bitcoin ETFs from multiple asset managers were approved.

Boeing rose following a 9.3% tumble in the prior two sessions, after CEO Dave Calhoun acknowledged errors by the U.S. planemaker as more than 170 jets remained grounded for a fourth day.

DocGo plunged after Fuzzy Panda Research revealed a short position on the health services company's stock.