On Wednesday, the Dow Jones Industrial Average jumped 161.41 points, or 0.56 per cent, to 28,745.09. The S&P 500 increased 15.87 points, or 0.49 per cent, to 3,253.05. The Nasdaq Composite Index rose 60.66 points, or 0.67 per cent, to 9,129.24, Xinhua news agency reported.
Nine of the 11 primary S&P 500 closed higher, with technology up 1.03 per cent, outpacing the rest. Energy fell 1.74 per cent, the worst-performing group.
Trump said on Wednesday that no Americans or Iraqis died in Iran's missiles attack against US forces in Iraq on Tuesday, vowing to impose powerful economic sanctions against Iran.
The Pentagon said in a statement on Tuesday that Iran launched more than a dozen ballistic missiles against US military and coalition forces in Iraq, causing a steep sell-off in the US stock futures Tuesday night.
A US drone struck a convoy at Baghdad International Airport last Friday, killing Qassem Soleimani, commander of the Quds Force of Iran's Islamic Revolutionary Guard Corps, sparking outrage and revenge threats from Tehran.
The US equities market has been volatile these days as traders grappled with fears of a wider conflict between the two nations.
On the economic front, U.S. private sector employment increased by 202,000 jobs from November to December, payroll data company Automatic Data Processing (ADP) reported Wednesday.
( With inputs from IANS )