U.S. stocks soared Wednesday, with a strong showing by former Vice President Joe Biden in the Democratic primaries buoying investors who view him as a more business-friendly alternative to Bernie Sanders.

The Dow Jones industrial average rallied 1,173.45 points to close at 27,090.86, rebounding after tumbling nearly 800 points a day earlier. The Standard & Poor’s 500 climbed 4.2% to end at 3,130.12, led by sharp gains in health care shares. The Nasdaq Composite rose 3.9% to finish at 9,018.09.

Biden capped a strong Super Tuesday by winning Texas, the third-largest overall prize in the Democratic primaries, and at least eight other states. Bernie Sanders, a strong critic of Wall Street, won the biggest prize of Tuesday's primaries with a victory in California.

"The market's reaction Wednesday shows that investors have a clear preference for Joe Biden over Bernie Sanders," says Michael Sheldon, chief investment officer and executive director at investment advisor RDM Financial Group at Hightower.

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Many investors fear a Sanders nomination as the Democratic presidential candidate because his economic proposals are not viewed as business-friendly. The strong showing from Biden on Tuesday and in primaries ahead could reduce those fears.

"The main reason investors prefer Biden is that he's a more established candidate, and investors know what they're going to get since he was in the Obama administration," Sheldon says. "Sanders would bring with him a lot of potential unknowns, including his plan for 'Medicare for All' and his restrictions in areas like health care, energy and financials, which could have wide-reaching impacts on a range of different industries."

Sanders' policy proposals for health care and the economy could hurt profits at insurers and other companies, analysts say. Health care stocks in the S&P 500 jumped nearly 6% for the biggest gain by far among the 11 sectors that make up the index. UnitedHealth Group climbed 11%, Anthem rallied 16% and Cigna added 11%.

The gains came following a day of wild swings Tuesday after a surprise decision by the Federal Reserve to cut interest rates by half a percentage point. The move was aimed at defusing fears the coronavirus outbreak might stunt global economic activity.

China, Australia and other central banks also have cut rates to shore up economic growth in the face of anti-virus controls that are disrupting trade and manufacturing. But economists warn that while cheaper credit might encourage consumers, rate cuts cannot reopen factories that have closed because of quarantines or lack of raw materials.

The U.S. rate cut was the Fed’s first outside a regularly scheduled meeting since the 2008 global crisis. That prompted some traders to think the Fed might foresee even more economic damage than markets fear.

“If the coronavirus has taught us anything, it’s that markets can be impacted by unexpected factors quickly and dramatically and that it’s important for investors to be prepared,” Randy Swan, chief executive and lead portfolio manager at Swan Global Investments, said in a note.

On Tuesday, the Dow dropped 786 points, and the 10-year Treasury yield briefly dipped below 1% for the first time. The yield on the 10-year Treasury fell to 0.98% Wednesday from 1.01% late Tuesday.

U.S. markets have fallen nearly 8% since setting a record two weeks ago.

The tide rose for stocks around the world on Wednesday. In Europe, Germany’s DAX returned 1.2%, the French CAC 40 rose 1.3% and the FTSE 100 in London gained 1.4%. In Asia, South Korea’s Kospi jumped 2.2%. Japan’s Nikkei 225 inched up 0.1%, the Hang Seng in Hong Kong slipped 0.2% and stocks in Shanghai rose 0.6%.

Contributing: The Associated Press