Stocks tick higher as Wall Street looks to build on Tuesday's afternoon rally

U.S. stocks rose slightly on Wednesday after the market staged a big midday reversal on Tuesday, with falling bond yields giving a boost to growth stocks.

The Dow Jones Industrial Average gained 87 points, or 0.3%. The S&P 500 and Nasdaq Composite gained about 0.4% each.

Wednesday's moves follow an intraday reversal in the previous session. The S&P 500 rallied back from a 2% loss in the final hours of trading on Tuesday and finished the day up 0.2%. The tech-heavy Nasdaq Composite outperformed, jumping 1.75%. The Dow lost 129 points, but was down more than 700 points at one point.

Whether the economy is about to fall into a recession continued to worry investors after the benchmark 10-year U.S. Treasury yield fell below the 2-year yield. The so-called yield curve inversion historically has been a warning sign that the economy may be falling or has already fallen into recession.

Oil prices tumbled below $100 a barrel Tuesday, further reflecting a potential economic slowdown. Energy stocks were the top decliners Tuesday. The sector as a whole fell 4%. It was the top performing sector in the S&P 500 for the first half of they year, the benchmark index's worst first half since 1970.

However, Wall Street analysts say a recession could be mild. On Tuesday Credit Suisse said it sees the U.S. dodging a recession as it slashed its year-end S&P 500 target to reflect the effect of higher capital cost on stock valuations.

"[The market] has been bracing for [a recession], and now it may actually be embracing it, the idea being: let's just get it over with, we're going have a recession, let's do it. Let's clean out the excesses and start all over again," said Ed Yardeni of Yardeni Research on CNBC's "Closing Bell: Overtime."

"The market starting to look ahead into next year and that could very well be a recovery year from whatever this recessionary environment turns out to be," he added. "We're all kind of doing a Hamlet recession – to be or not to be. I'm kind of thinking that there's going to be a mild recession."

NewEdge Wealth chief investment officer Cameron Dawson echoed that sentiment.

"Do we have a kind of drawdown that looks to be in that 30% range, which is the average for recessions, or something that looks closer to down 50%, which is what we saw back in the early 2000s and 2008 where we had two debt crises?" she said. "We don't see a debt crisis. We think that we could start to find some value around that 3,400-3,500 level because that's what gets us back to the pre-Covid highs."

There are no major earnings reports scheduled for Wednesday, but there will be a slew of economic reports coming out, including the minutes of the Federal Reserve's June meeting in the afternoon.

Mortgage demand fell week over week even as rates declined, according to the Mortgage Bankers Association. The latest Markit and Institute for Supply Management manufacturing PMI data will be released at 9:45 a.m. and 10:00 a.m., respectively. The Job Openings and Labor Turnover Survey, or JOLTS, will also be released at 10:00 a.m.