Wall Street closed sharply higher on Tuesday, led by a rally in mega-cap growth and energy stocks. Markets rebounded as investors came back from an extended weekend, wondering whether equities are currently oversold after pricing in the inflation pressures. All three major stock indexes ended in the green. How Did The Benchmarks Perform? The Dow Jones Industrial Average (DJI) gained 2.2% or 641.47 points to close at 30,530.25. Twenty-six components of the 30-stock index ended in the green, one remained unchanged, while three ended in the red. The tech-heavy Nasdaq Composite finished at 11,069.30, adding 2.5% or 270.95 points, led by a rally in tech stocks. The S&P 500 rose 2.5% or 89.95 points to close at 3,764.79. All the 11 broad sectors of the benchmark index closed in the green. The Energy Select Sector SPDR (XLE), the Consumer Discretionary Select Sector SPDR (XLY) and the Technology Select Sector SPDR (XLK) rose 4%, 2.6% and 2.3%, respectively. The fear-gauge CBOE Volatility Index (VIX) declined 2.7% to 30.19. A total of 12.4 billion shares were traded Tuesday, in line with the last 20-session average of 12.4 billion. Advancers outnumbered decliners on the NYSE by a 2.66-to-1 ratio. On the Nasdaq, a 2.22-to-1 ratio favored the advancing issues. Investors Divided On Whether Market Has Hit Bottom Last week, Wall Street encountered its worst trading week in more than two years. The S&P 500 officially entered the bear territory while Nasdaq managed to keep its head above the water, just about. Argument is rife on whether the markets have hit bottom and can only rise or whether the volatility will continue. Without doubt, the volume of sell-off that Wall Street has seen in recent days suggests that investors have already priced in a likely recession. But even as uncertainty about the Fed’s policies continues, days like Tuesday when stocks bounced back will continue to be seen in the markets, as in recent months. Choppy sessions have been frequent as investors strive to find some comfort in the Fed’s outlook toward tackling inflation with an extremely tight monetary policy. Tuesday saw investors ignoring the last selling week as they returned from the Juneteenth holiday, and presumed that markets had bottomed. Whether the sentiment remains is to be seen, but with further Fed policy tightening in the cards, one may argue that Tuesday was an anomaly. Jerome Powell’s submission to the Senate Banking Committee on Wednesday is expected to throw further light on the Fed’s current view of the economy and its plans. Oil Prices Go Up On High Demand And Tight Supply Oil prices jumped on Tuesday. Brent crude rose 0.5% to $114.65/barrel, while WTI crude registered a 1% rise to close at $110.65. U.S. production is at its highest since April 2020, but sanctions on Russian oil due to the Ukraine War means that the fuel market is reeling under supply pressures during peak summer demand. President Joe Biden said a decision on whether to pause a federal gasoline tax was expected this week. The United States is also pursuing talks with Canada and other countries to ensure further restrictions on Moscow's energy revenues by imposing a price cap on Russian oil. Consequently, shares of Diamondback Energy, Inc. ( FANG Quick Quote FANG - Free Report) and Exxon Mobil Corporation ( XOM Quick Quote XOM - Free Report) rose 8.2% and 6.2%, respectively. Diamondback Energy currently carries a Zacks Rank #3 (Hold). You can see . the complete list of today's Zacks #1 Rank (Strong Buy) stocks here Economic Data The National Association of Realtors reported that existing home sales declined for the fourth straight month in a row to a seasonally adjusted annual rate of 5.41 million in May, against a consensus of 5.4 million for the period. Sales were down 3.4% from April. For April, the numbers were revised down to 5.6 million from a previously reported 5.61 million.