April 8 (Reuters) - Wall Street's main indexes on Tuesday bounced back from a heavy selloff, led by technology stocks, on hopes of the U.S. opening up for negotiations on its aggressive tariffs.

The technology sector rose 3.5%, while indexes tracking banks and semiconductor stocks were up 4% and 5%, respectively.

Most megacap and growth stocks gained, with Nvidia adding 8% and Tesla rising 7%.

The CBOE Volatility index - seen as Wall Street's 'fear gauge' - retreated to 37.83 points after rising on Monday to its highest level since August last year.

The small-cap Russell 2000 index was trading 3.1% higher after three sessions of heavy losses.

"While today's market bounce offers some relief, trade tensions remain the elephant in the room. With Trump threatening a further 50% tariff on China and Beijing refusing to back down, sentiment could turn quickly," said Lukman Otunuga, senior market analyst at FXTM.

At 10:20 a.m. the Dow Jones Industrial Average rose 3.8%, the S&P 500 gained 4% and the Nasdaq Composite gained 4.5%.

Since the reciprocal tariff announcement on April 2, concerns over a global trade war and fears of a recession in the U.S. have gripped Wall Street, with the three major indexes hitting around one-year lows.

The Nasdaq confirmed a bear market on Friday, while the S&P 500 and the Dow are down more than 15% from their record-high closes.

Levels of various US assets since the start of the year

Uncertainty lingered after China said it will never accept the "blackmail nature" of the U.S. to Trump's threat to ratchet up tariffs on Chinese imports to more than 100%.

U.S. Treasury Secretary Scott Bessent said in an interview to CNBC on Tuesday tariff negotiations are the result of calls from other countries, not sliding financial markets, and China's escalation is a big mistake.

Meanwhile, Trump said he discussed tariffs, among others, in a "great" call with acting South Korean President Han Duck-soo.

Worries that the aggressive U.S. tariffs could spur inflation and hamper global growth have led to greater pricing of interest-rate cuts by the Federal Reserve.

Traders see more than 96 basis points of easing by the December, implying three fully priced in 25-bps cuts and a 84% chance of a fourth such a reduction, according to LSEG data.

A consumer price inflation reading is also due on Thursday, which could offer more clues on the inflation trajectory.

Among individual stocks, chipmaker Broadcom advanced 8.4% after the company said it was launching a new share buyback program of up to $10 billion.

Health insurer UnitedHealth Group gained 7.6% after the U.S. announced 5.06% increase in payment rates to private insurers for 2026 Medicare Advantage health plans.

Humana soared 11.8%, while Elevance Health also gained 4.5%. CVS Health jumped 9.8%. The insurer named UPS executive Brian Newman as its chief financial officer.

Advancing issues outnumbered decliners by a 13.36-to-1 ratio on the NYSE and by a 6.33-to-1 ratio on the Nasdaq.

The S&P 500 posted no new 52-week highs and no new lows, while the Nasdaq Composite recorded nine new highs and 24 new lows.