Stocks rebound after the Delta variant’s spread prompted a rout.

Stocks snapped back on Tuesday, rebounding from Wall Street’s worst day in months, with the S&P 500 recouping all of the previous days losses.

Surging numbers of coronavirus cases, spurred by the Delta variant, had unnerved investors on Monday and introduced a bout of volatility into financial markets. The quickening spread of the virus and the uncertain path of monetary policy have been a reminder that the economic recovery from the pandemic remains rocky.

“Markets are clearly reassessing the risks posed by the new variant,” said Hugh Gimber, a strategist at JPMorgan Asset Management in London. “Nothing has changed in the data, the current vaccines still appear to be very effective at preventing severe illness but the optimism around how smoothly and how quickly the global economy can reopen has faded this week.”

The S&P 500 rose about 1.7 percent on Tuesday, a day after the benchmark fell 1.6 percent in its sharpest decline since mid-May. The Dow Jones industrial average rose 1.8 percent and the Nasdaq composite gained 1.7 percent.

Trading in government bonds was volatile, with the yield on 10-year U.S. Treasury notes falling sharply before recovering to about 1.20 percent. On Monday, the yield had tumbled 10 basis points to 1.19 percent, its lowest point since February.

Stocks are taking their cue from the bond market at the moment, Mr. Gimbler said, adding that he expected bond yields to rise again. “Ultimately, a 10-year Treasury yield at 1.2 percent or even lower is not consistent with strength of the global economy today,” he said.

The Stoxx Europe 600, which tumbled 2.3 percent on Monday — the worst day this year — rose about 0.5 percent. Asian markets closed lower on Tuesday, following the drop on Wall Street the previous day.

The British pound fell 0.4 percent against the U.S. dollar to its lowest level since January. On Monday, the government lifted most of its coronavirus restrictions in England but still urged caution as the country reported nearly 40,000 new cases. The same day, the State Department and Centers for Disease Control and Prevention in the U.S. both told Americans to avoid traveling to Britain.

Mr. Gimbler said Britain was a test case that would “challenge the thesis that a widely vaccinated population can reopen without restrictions.” Therefore traders will be paying close attention to what happens there.

“Although bargain hunters will be sniffing around, nervousness is still largely the sentiment rippling through the markets, as concerns are growing that higher infection rates will bring about a fresh economic slowdown,” Susannah Streeter, an analyst at Hargreaves Lansdown, wrote in a note.

She added that tensions between the United States and China could raise concerns about global trade. On Monday, the Biden administration accused the Chinese government of hacking Microsoft.