All three major US stock indexes scored their biggest daily percentage increases since May 27 on Monday as investors sought bargains after the previous session's selloff and ramped up bets for a September interest rate cut after Friday's weaker-than-expected jobs data.

Tesla shares rose 2.2 percent after the electric vehicle maker granted CEO Elon Musk 96 million shares worth about US$29 billion.

Friday's selloff followed bleak July jobs data that was accompanied by steep downward revisions for May and June.

"Today is just a little bit of dip-buying. It does show a pretty healthy sign of folks out there looking for an opportunity to get in," said Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina.

"It's a little concerning in the sense the labour market... definitely appears to be weaker than people expected. A bit of an offset to that is the renewed rate cut expectations. There's a high probability we're getting a September cut."

Odds for a September rate cut now stand at about 84 percent, according to CME Fedwatch. Market participants see at least two quarter-point cuts by the end of this year.

The Dow Jones Industrial Average rose 585 points, or 1.3 percent, to 44,173, the S&P 500 gained 91 points, or 1.5 percent, at 6,329 and the Nasdaq Composite climbed 403 points, or 2 percent, to 21,053. (Reuters)