Intel's announcement of plans to take its self-driving car unit Mobileye public in the United States next year sent its shares soaring and cheered chip investors.

The Philadelphia SE Semiconductor index at one point rose more than 5 per cent after hitting a near one-month low on Tuesday.

Investors were also reassured by some positive news regarding the Omicron variant of COVID-19, which had helped send them fleeing from risk last week.

Before market open, British drugmaker GlaxoSmithKline said an antibody-based COVID-19 therapy it is developing with Vir Biotechnology was effective against all mutations of the Omicron variant.

That news added to the relief rally along with infectious diseases official Anthony Fauci's comment on Tuesday that preliminary evidence indicates while Omicron may have a higher degree of transmissibility it appears to be less severe. Fauci had made similar comments on Sunday.

"A week ago we saw a big scare because of Omicron and over the following week it appeared to be very contagious but less severe than people were worried about," said Peter Tuz, president of Chase Investment Counsel in Virginia.

Michael James, managing director of equity trading at Wedbush Securities in Los Angeles, said the GSK headline was already "instrumental to people's sentiment".

He also cited the Intel news and investor bets that the market would see its traditional December boost, known as the Santa Claus rally.

"There's certainly fears of missing out on the Santa Claus rally," said James. "It's a bigger picture risk-on mentality that's taking hold today."

According to preliminary data, the S&P 500 gained 95.17 points, or 2.07 per cent, to end at 4,686.84 points, while the Nasdaq Composite gained 455.72 points, or 2.99 per cent, to 15,680.87. The Dow Jones Industrial Average rose 492.21 points, or 1.42 per cent, to 35,719.24.

The CBOE volatility index, too, eased from a more than 10-month high last week.

Some travel shares continued gaining. The S&P 1500 Airlines finished down 0.62 per cent after rising for most of the session. The S&P 1500 Hotels, Restaurant and Leisure gained ground.

American Airlines rose for much of the session but closed down 0.2 per cent after the carrier announced the retirement of Chief Executive Officer Doug Parker.

In the semiconductor industry other big gainers besides Intel were Nvidia, Applied Materials and NXP Semiconductor's US listed shares.

Merck & Co fell as Guggenheim downgraded the stock to "neutral" from "buy" after the drugmaker paused enrolment in two late-stage clinical trials testing its experimental drug for treatment and prevention of HIV-1.

Australian Associated Press