U.S. stocks recovered Thursday from large early-session drops as Wall Street looked to shake off inflation data that showed consumer prices climbed more than expected.

The S&P 500 (^GSPC) was up about 1.7% by midday, while the Dow Jones Industrial Average (^DJI) edged higher by more than 500 points, or 1.9%. The technology-heavy Nasdaq Composite (^IXIC) ticked up 1.4%. The 10-year Treasury yield move closer to 4%.

Meanwhile, oil prices rose as WTI crude prices ticked higher 1.76% to $88.96 per barrel.

The Bureau of Labor Statistics released its Consumer Price Index (CPI) for September early Thursday, which showed prices rose 8.2% over the prior year and 0.4% over the prior month. The core consumer price index, which excludes food and energy, rose 6.6% from a year ago, marking the highest level since 1982. Core CPI rose by 0.6% month over month.

Economists surveyed by Bloomberg had expected a slight deceleration to 8.1% annually and the core reading to accelerate to 6.5% from a year earlier.

This reading marks the second consecutive hotter-than-expected CPI print. Shelter, food, medical care indexes were the largest of "many contributors," the reported noted. The retreat of overall inflation — from 8.3% year-over-year in August — came as gasoline prices have eased.

Analysts said the report essentially clinched at least another 75-basis-point rate hike from the Federal Reserve when it meets in November.

"The stronger than expected 0.4% rise in consumer prices in September, driven yet again by a stronger increase in core prices, nails on a 75bp rate hike at the November meeting and, in contrast to the Fed minutes released yesterday, suggests that the Fed may need to continue raising rates at that pace in December and perhaps beyond too," wrote Michael Pearce, senior economist at Capital Economics.

In any case, investors continue to navigate a murky week marked by corporate earnings in addition to the inflation data. On Wednesday, the Producer Price Index (PPI), a measure of prices at the wholesale level, rose 0.4% in September after falling 0.2% during the prior month as inflation persisted.