In a reversal from the prior three sessions, growth stocks jumped 3% to outperform the 1.7% climb in value stocks on the day.
S&P late Friday announced it would include online craft seller Etsy Inc, semiconductor equipment maker Teradyne Inc and pharmaceutical technology company Catalent Inc to the S&P 500 instead.
"I think we should start to anticipate a rotation, the momentum behind tech is going to ease", Seema Shah, a chief strategist at Principal Global Investors, told the Wall Street Journal.
The S&P 500 rose 67.12 points, or 2.01 per cent, to 3,398.96.
"To the extent that "buy the dip" mentality persists, this market may possess a somewhat more stubborn bullish streak", said Mizuho Bank.
"On the one hand, the slide in the share price is due to its non-inclusion in the S&P 500, but on the other hand the slide is also a normalisation of the company's valuation", Frank Schwope, an analyst at NORD/LB, said.
By 9:40 am ET (1:40 pm GMT), the Nasdaq Composite was up 168 points, or 1.5%, while the Dow Jones was up 228 points, or 0.8%, and The S&P 500 is up 1.1%.
In Asia, the Shanghai Composite Index lost 0.6% to 3,234.82 after spending most of the day in positive territory.
Tesla's shares recorded their worst single-day percentage drop ever and added to the broader sell-off in technology stocks, which have dominated Wall Street's recovery from the coronavirus-driven crash earlier this year.
The rebound in equities has steadied a sharp selloff that has highlighted the fragility of a rally that has carried the Nasdaq up 70 per cent from March lows. "The market structure is dislocated at the moment. with stimulus and (markets at) all time highs - there's no reference point". The euro gained to $1.1825 from $1.1823. Risk aversion also pushed the yen to a one-week high against the dollar.
Brent crude futures fell 0.4 per cent to US$40.63 a barrel and U.S. crude futures fell 0.6 per cent to US$37.82 a barrel.
U.S. stocks rebounded on Wednesday after a three-day sell-off driven by tech giants led to a more than 10% decline in the Nasdaq composite index.
Media reports of SoftBank's option purchases also reminded investors that market makers might have billions of dollars worth of long positions - bets the market will rise - as hedges against options trades, which will have to be sold as prices fall.