Wall Street rally extends into the close, Dow up 550 points

The West Texas Intermediate contract for June was up 19%, settling at $13.78 per barrel, after an earlier decline. Brent futures, meanwhile, were up 7.6% at $20.76 per barrel, recovering from a sharp overnight drop. 

Energy stocks rose broadly amid oil's surge. The sector gained over 3% as Halliburton traded 9.3% higher. Diamondback Energy and Noble Energy both gained more than 7%.

Crude seemed to get a jolt after President Donald Trump tweeted he had "instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea."

Oil's move higher comes after the May contract, which expired on Tuesday, traded at a negative price for the first time ever earlier in the week amid concerns over dwindling demand amid the coronavirus outbreak.

"The short term story in the market remains oil. Yet, this is much bigger than oil," wrote Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. "The price action over the last 48 hours not only points us back to the economy and demand side, but is showing signs of spillover and contagion in risk toward other markets."

White House economic advisor tried to assuage concerns over declining energy demand, telling CNBC's "Squawk Box" that prices should rebound once the economy re-opens. 

Oil's historic drop led to a Dow decline of more than 1,000 points, or 5.1%, between Monday and Tuesday. The S&P 500 and Nasdaq lost more than 4% each to start off the week.

"This week investors are realizing that even though the crisis could soon get better, the negative impacts of having an economy which is essentially shut down are magnifying at an alarming rate. With no demand even for a couple of months, energy prices go negative as excess oil supplies balloon," Jim Paulsen, chief investment strategist at the Leuthold Group told CNBC. 

A slew of companies rose on the back of solid quarterly reports, giving the broader market a boost. 

Chipotle Mexican Grill posted a better-than-expected profit, sending its stock up more than 10%. Snap gained 31.6% after releasing its latest quarterly results. Texas Instruments climbed over 3% after the chipmaker released its earnings for the previous quarter. 

Overall, 84 S&P 500 companies have reported earnings, according to data from Refinitiv. Of those companies, 67% have beaten analyst profit estimates. Still, the S&P 500 was headed for a 13.7% earnings decline on a year-over-year basis. 

"Initial quarterly reports from leading US companies could have been worse as the economy reels from the shutdown over the coronavirus pandemic," said Daniel Morris, Senior Investment Strategist at BNP Paribas Asset Management, in a note. "Not only have reported results been surprisingly strong, the (limited) guidance that companies have given about the earnings outlook has actually been slightly more positive than it was during the same period last year."

"Nonetheless, several companies have refrained from giving any outlook due to the high degree of uncertainty about how government support measures evolve," Morris said. 

Also helping sentiment on Wednesday, Senate Republicans and Democrats on Tuesday passed a $484 billion coronavirus relief package that focused on small businesses, hospitals, and testing. The House could approve the bill as early as Thursday.

—CNBC's Jeff Cox contributed to this report.

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