US equity indexes rose, led by financials and industrials, and most government bond yields advanced in midday trading on Wednesday.

The Nasdaq Composite rose 0.6% to 18,254.1, with the S&P 500 up 0.6% to 5,783.2 and the Dow Jones Industrial Average 0.9% higher at 42,449.5. The communication services sector was the steepest decliner intraday.

West Texas Intermediate crude oil fell 0.4% to $73.23 a barrel. Israeli Prime Minister Benjamin Netanyahu has warned the Lebanese people they face falling "into the abyss of a long war" as his country escalates its attacks on Hezbollah, CNN reported.

The CBOE Volatility Index, also known as the fear gauge for investors, dropped 2.7% to 20.85.

In economic news, wholesale inventories rose by 0.1% in August, revised down from a 0.2% gain in the advance reading and following a 0.2% increase in July. Analysts in a survey compiled by Bloomberg expected August inventories to be unrevised from the advance estimate.

Mortgage applications fell by 5.1% in the week ended Oct. 4 as the strong September employment report drove mortgage rates to their highest level since August, according to data released by the Mortgage Bankers Association on Wednesday. This follows a 1.3% decrease in overall activity in the week ended Sept. 27.

Most US Treasury yields rose intraday, with the 10-year yield up 1.6 basis points to 4.05% and the two-year rate 2.4 basis points higher at 4%.

In company news, Citigroup upgraded Norwegian Cruise Line (NCLH) to buy from neutral while raising its price target to $30 from $20. Shares of the cruise liner traded 10% higher intraday, the top performer on the S&P 500. Citigroup also adjusted rival Carnival's (CCL) price objective to $28 from $25. Carnival's shares were up 7% intraday, the second-biggest gainer on the index.

Boeing (BA) said it withdrew its latest pay offer to striking workers following a breakdown in negotiations with the International Association of Machinists and Aerospace Workers. Shares of the aircraft manufacturer dropped 2.6% intraday, the worst performer on the Dow.

Meanwhile, Alphabet's (GOOG, GOOGL) Google is facing a potential breakup of its search dominance by the US Department of Justice, according to a Tuesday court filing.