Stock indexes had a mild rebound following a significant sell-off Monday that resulted in the market’s worst day in almost two years.

The S&P 500 and the tech-focused Nasdaq Composite both closed 1% higher. The Dow Jones Industrial Average was up 0.7%, or about 300 points.

Leading the rally was Nvidia, which has led the entire market for much of the year thanks to the importance of its chips for artificial intelligence programming. It finished 4% higher after having fallen 7% Monday. Meta, the parent company of Facebook, also climbed 4% Tuesday. Uber, which reported strong earnings early Tuesday, soared 11%.

Japan’s Nikkei stock index, which had its worst day in a generation Monday, rallied for its best day since 2008, surging 10.2%

Still, the day’s gains won’t make up for the losses stocks suffered Monday, when the Dow plunged more than 1,000 points, or 2.6%, the S&P fell 3%, and the Nasdaq dropped 3.4%.

But the indices remain higher this year, with the Dow up about 3.5%, the S&P 500 up about 10% and the Nasdaq up about 9.5% since the start of the year.

Some market participants said Monday’s tumble was overdone. In a note to clients Tuesday, Goldman Sachs analysts noted that central banks like the Federal Reserve ‘are no longer constrained by the fear of high inflation’ and are ready to lower interest rates. In addition, investors across the spectrum have built up ‘very significant cash piles’ that can be used to purchase stocks at their suddenly lower prices, they wrote. And debt among firms remains low, meaning they ‘can absorb the impact of weaker growth better than in many other downturns.’

Yet, there remains disagreement about how fast the economy is slowing. Analysts with Citibank said Tuesday that they disagreed with the notion that Friday’s jobs report, which showed unemployment unexpectedly increasing to 4.3% and just 114,000 jobs added in July, was an outlier data point, as at least two regional Federal Reserve presidents have suggested.

‘The unfortunate reality is that a range of data confirm what the rise in the unemployment rate is now prominently signaling — the U.S. economy is at best at risk of falling into a recession and at worst already has,’ they wrote in a note to clients Tuesday, pointing to a variety of data — from a hiring rate that has slowed to a crawl to increasing unemployment claims — that things are worse than they seem.

The focus remains on what the Federal Reserve, which is in charge of balancing inflation and jobs growth by raising and lowering the cost of borrowing, will do after it announced last week that it was leaving rates unchanged.

Some analysts have now come to see the decision as a mistake.

The Citi analysts said that a larger-than-usual 50-basis-point rate cut by the Fed at its next meeting in September is now the most likely scenario and that a potential inter-meeting cut — usually done only in emergencies — is “on the table.”

‘Data over the next month is likely to confirm the continued slowdown,’ they wrote.

Still, others argued there is zero chance that the Fed would make such a move, which is usually reserved for extreme scenarios like the Covid pandemic.

Torsten Sløk, chief economist at Apollo Global Management, said in a note Tuesday that the economy remains in decent shape. His case was bolstered by the latest real-time data on gross domestic product from the Atlanta Federal Reserve on Tuesday, which showed third-quarter GDP tracking 2.9%, up from 2.5% last week.

‘If the economy were crashing, default rates would be spiking higher, and that is not what the data shows,” he wrote.