Wednesday saw the major domestic equity indexes close out the trading day on higher ground as the S&P 500 index and Dow Jones Industrial Average chalked up their largest daily percentage gains since May 4. The upward trend was due to a combination of an  easing of the political turmoil in Italy and a rise in crude oil prices that sent energy stocks higher.

The S&P 500’s gains erased the losses of Tuesday, when the index posted its first 1 percent drop in May. Fears about instability in Italy and the possibility of the country’s exit from the euro sent investors heading for the exits on Tuesday. The Treasury market, on a total return basis, chalked up its best day since at least July 2011, according to the Bloomberg Barclay’s Treasury Aggregate Index.

Stocks reversed after Italy’s 5-Star Movement made a renewed attempt to form a coalition government and called for euro skeptic Paolo Savona to withdraw his candidacy as economy minister.

The Italian government’s successful auction of five- and 10-year bonds also assuaged concerns about the country’s ability to finance itself after a sell-off in bonds on Tuesday resulted in the biggest one-day surge for two-year yields in 26 years.

The S&P 500 index’s energy sector index posted the largest gain of the index’s 11 major sectors, rising 3.1 percent, its largest one-day gain in seven weeks, as domestic crude oil prices settled 2.2 percent higher.

The Russell 2000 index of small-cap stocks rose 1.5 percent to end at an all-time closing high, buoyed by data confirming the strength of the economy. Small-cap companies generally are more domestically focused than their large-cap counterparts.

ADP’s monthly report indicated private sector employment increased by 178,000 jobs in May. The Commerce Department revised its estimate of first-quarter gross domestic product growth slightly downward. However, GDP growth in the second quarter could at a rate that exceeds 3 percent on an annual basis.

Salesforce.com rose 1.9 percent and computer and printer maker HP Inc (HPQ.N) jumped 4.0 percent after both companies raised their full-year profit forecasts.

Approximately 6.83 billion shares changed hands on the major domestic equity exchanges, as compared to the 6.59 billion share average over the past 20 trading days.

First Quarter Economic Growth Revised Downward

The nation’s economic growth slowed a bit more than initially projected during the first quarter as consumer spending rose at its weakest pace in nearly five years. However, going forward it appears that activity is already picking up against the backdrop of a tightening labor market and tax cuts.

According to a report by the Commerce Department, gross domestic product increased at a 2.2 percent annual rate in its second estimate of first-quarter GDP, instead of the previously reported 2.3 percent pace. While business spending was stronger than initially estimated, inventory investment was far smaller than the government reported last month.

The economy grew at a 2.9 percent rate in the fourth quarter. The $1.5 trillion income tax cut package will add to economic growth this year and lift annual GDP growth. Growth is also expected to some degree of stimulus from increased government spending.

April data including retail sales, trade and industrial production suggest the economy regained speed early in the second quarter. Growth estimates for the second quarter are above a 3 percent rate.

An alternative measure of economic growth, gross domestic income (GDI) increased at a 2.8 percent rate in the January-March quarter, the fastest since the third quarter of 2016. GDI rose at a 1.0 percent pace in the fourth quarter.

The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, increased at a 2.5 percent rate in the first quarter. That followed a 2.0 percent rate of growth in the prior period.

The income side of the growth ledger was aided by after-tax corporate profits, which rose at a 5.9 percent rate last quarter after rising at a 1.7 percent pace in the fourth quarter. The government reduced the corporate tax rate to 21 percent from 35 percent effective January.

Wages and salaries also received a lift from lower tax rates, increasing $119.5 billion in the first quarter, an upward revision of $3.1 billion from earlier estimates.

Separately, the ADP national employment report on Wednesday showed private sector payrolls increased by 178,000 jobs in May after rising 163,000 in April. The data was released ahead of the government’s more comprehensive employment report on Friday.

Steady growth and a robust labor market are seen encouraging the Federal Reserve to raise interest rates next month.

U.S. financial markets were little moved by the data as investors keep a wary eye on political developments in Italy. The dollar fell against a basket of currencies and prices for Treasury paper traded lower.

Growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked to a 1.0 percent rate in the first quarter, rather than the previously reported 1.1 percent pace. It was the slowest pace since the second quarter of 2013 and followed the fourth quarter’s robust 4.0 percent rate.

Businesses accumulated inventories at a $20.2 billion rate, instead of the $33.1 billion pace estimated last month. Inventory investment contributed 0.13 percentage point to GDP growth instead of 0.43 percentage point. The smaller inventory build bodes well for second-quarter GDP growth.

The trade deficit in the first three months of the year was a bit larger than initially thought and had no impact on the GDP growth rate. Trade was previously estimated to have added 0.20 percentage point to output.

It could contribute to GDP growth in the second quarter as another report from the Commerce Department showed the goods trade deficit falling 0.6 percent to $68.2 billion in April.

Business spending on equipment was revised up to a 5.5 percent growth rate in the January-March quarter from the 4.7 percent pace estimated last month. That was still a moderation in investment following double-digit growth in the second half of 2017. April durable goods data suggested business spending on equipment is likely to slow further in the second quarter.

Investment in homebuilding fell at a 2.0 percent rate in the first quarter instead of being unchanged as reported last month.