Major averages rebounded Tuesday as investors stepped in to buy the dip from the Dow Jones Industrial Average’s worst day in eight months.

The comeback rally gained steam steadily through the session as a bounce in Treasury yields soothed some concerns that a Covid resurgence would slow down the economic recovery. As the 10-year yield climbed back above 1.20%, the run in stocks increased.

The S&P 500 climbed 1.52% to 4,323.06. 

With Tuesday’s rebound, the S&P 500 sits 1.6% below its record hit last week. During Monday’s losses, the equity benchmark traded below its 50-day moving average at one point. However, the index managed to close above that key technical level Monday, an optimistic sign for traders that foreshadowed Tuesday’s rebound.

Earnings season continues on Wednesday with key reporting from Coca-Cola, Johnson & Johnson, Verizon, CSX, Las Sands and Texas Instruments. About 85% of S&P 500 companies that have reported so far have beaten estimates, according to FactSet.

U.S. stock futures were flat in early morning trading on Wednesday after the major averages clawed back much of their losses from Monday’s sell-off.

Netflix reported disappointing third quarter subscriber guidance after the bell on Tuesday, but the stock gained 0.6% in extended trading. The streaming giant said it expects 3.5 million net subscribers in the third quarter, nearly 2 million below analysts’ estimates. The company also reported earnings that missed expectations.

The Nasdaq Composite rose 1.6%.

Some strategists see the market heading into a volatile period, in which there could be a deeper pullback. Investors are juggling inflation concerns as well as new Covid cases are rebounding in the U.S. as the delta variant spreads.