Nasdaq jumps 2.5% as investors look to reset after worst weekly drop in 2 years

• US stocks jumped sharply Tuesday as investors returned from Monday's Juneteenth break.
• Stocks rebounded after the S&P 500 last week sank by 5.8%, the worst weekly performance since March 2020.

US stocks charged higher Tuesday, with tech shares among those cutting into the recent rout set off by pricier interest rates and recession fears as the Federal Reserve seeks to cool down inflation.

All 11 of the S&P 500's sectors gained ground, led by an almost 6% rise in the energy group. Among individual names, Tesla shares surged as CEO Elon Musk confirmed a 3.5% workforce reduction and said demand for its electric vehicles is "extremely high."

Trading was closed Monday for the observation of Juneteenth. Investors returned to the markets with last week's 5.8% loss in mind. The worst weekly performance since March 2020 took place after the Federal Reserve raised interest rates by 75 basis points.

Here's where US indexes stood at 4:00 p.m. on Tuesday:

• S&P 500: 3,764.84, up 2.45%

• Dow Jones Industrial Average: 30,531.77, up 2.15% (642.27 points)

• Nasdaq Composite: 11,069.30, up 2.51%

"The Fed seems dead set on raising rates this year to levels that, in our view, would clearly slow the economy. It seems to be responding to the 'politics' of current high inflation," BlackRock Investment Institute said in a weekly update published Tuesday. "Current high core inflation rates reflect an imbalance of demand and supply broadly across the economy. It isn't due to overheating demand but unusually low production capacity in an incomplete restart following the pandemic."

Fed Chairman Jerome Powell will appear before Congress on Wednesday and Thursday to give semi-annual testimony about monetary policy, and investors will watch for his views on the state of the world's largest economy.

Around the markets, Cathie Wood warned the Fed could cause a recession if it keeps hiking interest rates.

Russia is now China's biggest oil supplier, overtaking Saudi Arabia.

Oil prices were mixed. West Texas Intermediate crude gained 0.9% at $110.58 per barrel. Brent crude, the international benchmark, slipped 3 cents to $114.66.

Gold fell 0.4% to $1,834 per ounce. The 10-year yield rose 6 basis points to 3.30%.

Bitcoin gained 3.4% at $21,142.17.