The benchmark Dow Jones Industrial Average exploded 619 points higher on Wednesday, posting its biggest gain since the 2008 financial crisis and the third largest in its history.
The huge rally is a dramatic rebound after six days of panicked selling driven by concerns about China's slowing economy and how it will impact the rest of its trading partners.
The broader S&P 500 jumped a whopping 3.9 percent on Wednesday, notching its biggest single-day percentage gain since 2011. The tech heavy Nasdaq rebounded 4.2% higher.
According to S&P Dow Jones Indices, an eye-watering $2.1 trillion of value was wiped out from the S&P 500 in the last six trading days.
Investors were clearly aware that bargains were to be had as the recent declines were the first time in four years all the major U.S. indexes had declined more than 10 percent, which is generally viewed as a correction.
While the one day pop was badly needed, there remains plenty of reason to remain cautious. The weakened Chinese economy will likely persist for some time and its effects will be slow to propagate through the global financial system.
"There's a moderate-sized storm brewing that will keep the market in check here over the next 60 to 90 days," Federated Investors vice president and portfolio manager Matthew Kaufler was quoted as saying. "We've probably absorbed the worst of the volatility in terms of magnitude but I don't know that we're done with the volatility. I think the correction phase will continue, just at a lower amplitude than before."