Stocks on Wall Street closed broadly higher Wednesday as investors welcomed encouraging economic data and quarterly earnings reports from big companies including Starbucks.

The S&P 500 rose 1.6% to an almost 2-month high, while the Nasdaq gained 2.6%. Both indexes more than recouped losses earlier in the week. The Dow Jones Industrial Average rose 1.3% and the Russell 2000 index of smaller companies ended 1.4% higher.

Technology companies, retailers and communications companies were some of the biggest winners. Only energy sector stocks fell, dragged down by lower oil prices.

Investors cheered a report on the services sector, which makes up the bulk of the U.S. economy. The sector grew faster than expected in July, according to the Institute for Supply Management. A separate report showed U.S. orders for big-ticket, durable goods increased more than expected in June.

Some weak recent data on the economy heightened speculation that the peak for inflation and for the Federal Reserve’s aggressive rate hikes may be approaching or has already passed. The weak data, though, also shows the risk of a recession as the Fed puts the brake on the economy.

That’s why Wednesday’s more positive economic reports helped put traders in a buying mood.

“That just provides people with more evidence that this economy is hanging in there,” said Jeff Buchbinder, equity strategist for LPL Financial. “At this point, we have a combination of evidence that inflation is coming down.”

The S&P 500 rose 63.98 points to 4,155.17. It had been down nearly 1% for the week heading into Wednesday. It’s now up 0.6% for the week.

The Dow gained 416.33 points to 32,812.50. The Nasdaq added 319.40 points to end at 12,668.16. The Russell 2000 picked up 26.48 points to 1,908.93.

The yield on the 10-year Treasury fell to 2.71% from 2.73% late Tuesday.

The S&P 500’s bumpy start this week follows its best month since late 2020. July was a rare winning stretch for the market, which has struggled this year under worries about the highest inflation in 40 years and rising interest rates from the Federal Reserve to combat it.

Earnings remain in focus this week as investors parse the latest results and statements from companies to better understand how inflation is affecting businesses and consumers.

Drugstore chain CVS rose 6.3% after reporting solid financial results and raising its profit forecast for the year. Starbucks rose 4.3% after also reporting solid financial results. Nearly three-quarters of companies within the benchmark S&P 500 have reported earnings for the latest quarter and the results have mostly beaten analysts’ forecasts.

Several companies, though, have slipped amid disappointing results. Taco Bell owner Yum Brands fell 1.9% following a weak earnings report and online dating service company Match Group tumbled 17.6% after giving investors a weak financial forecast.

PayPal jumped 9.2% on a report that activist investor Elliott Management has taken a large stake in the payment company.

Robinhood Markets, whose stock trading app helped bring a new generation of investors to the market, rose 11.7% following an announcement that it’s cutting nearly a quarter of its workforce. Crashing cryptocurrency prices and a turbulent stock market have kept more customers off its app.

Oil prices fell following OPEC’s decision to boost production in September at a much slower pace than previous months. U.S. crude oil fell 4% to settle at $90.66 per barrel, while Brent crude, the international standard, settled 3.7% lower at $96.78 per barrel.

The pullback in oil prices weighed on energy sector stocks. Hess fell 3.6%