U.S. stocks close higher after two days of steep losses

U.S. stocks rebounded on Friday as the fears over rising interest rates eased and earnings reports turned out to be better than expected.

The Dow Jones Industrial Average rose 287.16 points, or 1.15 percent, to 25,339.99. The S&P 500 was up 38.76 points, or 1.42 percent, to 2,767.13. The Nasdaq Composite Index increased 167.83 points, or 2.29 percent, to 7,496.89.

On the earnings front, JP Morgan Chase topped analysts' expectations for third-quarter earnings and revenue on Friday as better-than-expected retail banking results offset the weakness in bond trading.

The largest U.S. bank by assets reported that its revenue rose 5 percent to $27.82 billion and earnings per share rose 33 percent to $2.34.

Wells Fargo reported revenue of $21.9 billion and diluted earnings per share of $1.13, both beating expectations.

Citigroup also reported better-than-expected earnings but its revenue was lower than forecast. In the third quarter, the company's earnings per share reached $1.73, with its revenue at $18.39 billion.

Investors are expecting another strong earnings season.

On the economic front, the University of Michigan's preliminary consumer sentiment gauge for October was 99.0, lower than the expected reading of 100.4.

Stocks plunged in the previous two sessions, suffering steep losses sparked by the recent interest rate hike and a sell-off in tech shares.

All three major indices, the Dow, the S&P 500 and the Nasdaq, had lost more than 5 percent decline on Wednesday and Thursday.