The S&P 500 is back near record highs, with investors reassessing the risks from the coronavirus strain, as focus turns to Friday's inflation data.
Analysts said stock markets are likely to stay volatile until more is known about the Omicron coronavirus variant.
US stocks have stayed strong throughout the year and are still near record highs, but investors are keeping an eye on the situation in Europe.
Stocks have remained buoyant on the back of strong earnings and economic optimism. But crypto has taken a hit in recent days.
Stocks remain around records highs despite inflation soaring, in part because the bond market is so unattractive.
Stock market investors were bracing for data on US CPI inflation, which is expected to have hit a 31-year high in October.
Assets hovered at record highs even after the Fed said that "asset prices may be vulnerable to significant declines."
Futures signal more gains ahead for the tech-heavy Nasdaq after the Federal Reserve cut back on its bond purchases, as widely expected.
A strong earnings season has boosted stocks, but the Federal Reserve could start cutting its support for the economy on Wednesday.
Stock-market investors were feeling positive even as central banks prepared to dial down their support for the economy.
Some optimism returned to stock markets at the end of the week, as earnings season picked up pace.
Stock market investors' focus was on third-quarter earnings, with a slew of big banks due to report on Thursday.
Stock market investors are worrying about soaring energy prices pushing up inflation, among a host of other concerns.
US stocks looked set to to climb after a rocky start to the week, with the prospect of the country defaulting on its obligations on investors minds.
Stock markets were unfazed by the Federal Reserve saying it was likely to cut back its bond purchases soon - which most analysts read as November.
There was a strong "buy-the-dip" impulse after the Evergrande crisis sent stocks tumbling, strategists said.
Action in stocks was muted as investors waited for the release of US consumer-price inflation data that could influence the Fed's decision making.