Gen. William W. Averell won a rare victory over Confederate forces under Maj. Gen. Stephen D. Ramseur at the Battle of Rutherford's Farm.

The poor Confederate performance at the battle, as well as a series of small cavalry engagements south of Winchester the following day led Union commanders George Crook and Horatio G. Wright to conclude the Confederates were merely fighting a rearguard action and that Early was leaving the Valley and heading for Richmond to reinforce the Army of Northern Virginia.

Crook still believed Early's infantry had left the Valley and sent only two of his division with cavalry support to meet the attack.

The Confederate position extended well to each side of the Valley pike south of Kernstown, anchored on each flank on high ground and screened by cavalry.

Ramseur's division formed on his left with its flank resting on Sandy Ridge to the west of Kernstown, screened by Col. William "Mudwall" Jackson's cavalry.

It soon became apparent to the Federal divisional commanders that they were facing a superior Confederate force which they were hesitant to attack and relayed the information to Crook.

As Hayes's brigade advanced in support, Breckinridge marched Wharton's division to the northeast into a deep ravine that ran perpendicular to the Valley Turnpike.

Mulligan immediately ordered a withdrawal, and was mortally wounded as he tried to rally his troops and prevent a full rout during the retreat.

The Confederate infantry pressed the fleeing Federals all the way back through Winchester and the cavalry kept at their heels well into West Virginia.

With the Shenandoah Valley clear of Union forces, Early launched a raid into northern territory, the last made by a substantial Confederate force during the war, burning Chambersburg, Pennsylvania as retribution for David Hunter's burning of civilian houses and farms earlier in the campaign.

(Hunter had also burned the Virginia Military Institute in Lexington, but Early's orders to his cavalry under John McCausland did not mention this as a justification.)