U.S. stocks closed sharply higher Wednesday, allowing the benchmark S&P 500 to post its biggest three-day gain since August.

Solid gains on Wednesday came as the minutes from the Federal Reserve’s January policy meeting suggested that policy makers are inclined to pause the tightening process due to recent market turmoil.

The majority of Fed officials agreed that the best policy would be to wait for additional information about the strength of the economy before making any further attempts to raise interest rates in 2016.

The S&P 500 index SPX, -1.66% gained 33.25 points, or 1.7%, to 1,926.83, recording its first three-day winning streak this year. The S&P has leapt more than 5% since Thursday’s close, its biggest three-day gain since August.

The S&P 500’s energy sector jumped 2.9%, following a 5.6% rally in oil futures. Technology and consumer discretionary stocks also attracted buyers, rising more than 2%.

“Because the Fed mentioned the downside in the market was negative, stock investors took it as a dovish sign and are betting that there will be no rate hikes in March,” said Karyn Cavanaugh, market strategist at Voya Investment Management.

Cavanaugh cautioned that despite the three-day rally, it is premature to call the bottom for the market.

But even as stocks climbed, some analysts weren’t convinced that the sharp rally over the past three days is sustainable.

“This price action is typical of bear markets and is driven by short-covering,” said Michael Antonelli, equity sales trader at R.W Baird & Co.

“It is clear that when high-beta cyclicals and momentum shorts, such as energy and banks, are sharply outperforming markets, it is due to covering short positions. We expect this rally to fail at about 1,950-1,970 level on the S&P 500, the same levels it failed in January,” Antonelli said.

Bespoke Investment Group tweeted a chart showing stocks with high short interest rallied the most over the previous two sessions.

Among other key benchmarks, the Dow Jones Industrial Average DJIA, -1.24% climbed 257.42 points, or 1.6%, to 16,453.83, led by Chevron Corp. shares CVX, -1.37% and Boeing Co. BA, -2.85% . The tech-laden Nasdaq Composite COMP, -2.18% advanced 98.11 points, or 2.2%, to 4,534.06.

The day’s moves were aided by economic data that, on balance, were better than expected. The cost of producing goods and services rose 0.1% in January, the Labor Department said Wednesday, defying expectations for a 0.2% decline. Meanwhile, housing starts fell 3.8% in January to a seasonally adjusted annual rate of 1.1 million, missing economists’ forecasts.

“Data today assuaged investors’ concerns that we are not heading into a recessions,” said Jack Ablin, chief investment officer at BMO Private Bank.

“But in spite of the downturn, markets are still relatively expensive through the lens of earnings. We expect that the Federal Reserve will not continue tightening, but will not provide quantitative easing either,” Ablin said.

Last week, Fed Chairwoman Janet Yellen acknowledged in testimony to Congress that concerns about the global economy could cloud the U.S. economic outlook and may slow the pace of future rate increases.

Read:Why economists increasingly think the Fed’s hands are tied

A rally in crude oil CLH26, boosted shares of energy and materials companies around the world. Oil futures jumped 5.6%, to end at $30.66 a barrel on Wednesday.

The rally in oil futures was driven by talks between Iran and Organization of the Petroleum Exporting Countries to freeze oil production to boost prices. Iran’s oil minister Bijan Zanganeh said he supported efforts to calm oil markets but didn’t say his country would also limit its production as it emerges from economic sanctions that restricted oil exports.

Read: 5 key reasons oil is sinking after oil-output freeze

Movers: Garmin Ltd. GRMN, -1.70% shares jumped 17% after better-than-expected quarterly results, making it the best performing stock on the S&P 500.

Shares of Fossil Group Inc. FOSL, -2.39% soared 29% after the watch and jewelry maker late Tuesday reported better-than-expected results.

Priceline Group Inc. US:PCLN climbed 11% after the company beat fourth-quarter earnings expectations.

Kinder Morgan Inc. KMI, -1.76% shares rallied 10% on news that Warren Buffett’s Berkshire Hathaway took a new stake in the company with 50,700 shares.

Alphabet Inc. GOOGL, -3.42% GOOG, -3.49% rose 2.5% after the Google parent announced Tuesday afternoon that its think tank, previously called Google Ideas, will become a technology incubator separate from the Google search company.

Read:This has been the worst quarter for company earnings reports since 2009

Other markets:European stocks closed higher, getting a lift from the rally in oil and mostly higher metals prices. Investors shook off a mostly down session in Asia.

Gold US:GCJ6 and silver edged up to end higher even as investors continued their move back to more riskier investments.