U.S. stocks are bouncing back, and calm is returning to Wall Street after Japan's market soared earlier Tuesday to claw back much of the losses from its worst day since 1987.

The S&P 500 was rallying by 1.6% in midday trading and on track to break a brutal three-day losing streak. It had tumbled a bit more than 6% after several weaker-than-expected reports raised worries the Federal Reserve had pressed the brakes too hard for too long on the U.S. economy through high interest rates in order to beat inflation.