Updated from 1:27 p.m. ET on Tuesday, June 13

A two-day selloff came to an end on Tuesday, June 13, as high hopes for an interest rate hike drove financial stocks higher and the tech sector made a comeback. 

The S&P 500 was up 0.4%, the Dow Jones Industrial Average gained 0.42%, and the Nasdaq rose 0.6%. The Dow briefly touched an intraday record high of 21,318.43.

The Federal Reserve convened for its two-day meeting on Tuesday. Markets expect few surprises there. An interest rate hike in June has been widely expected since Fed commentary in recent weeks suggested there were more hawks than doves. Members have pointed to a tightening job market, the risk of being behind the curve on inflation, and a generally healthy economic recovery.

The Federal Open Market Committee, the monetary policy arm of the central bank, will make an announcement on interest rates on Wednesday, June 14.

Wall Street is incredibly confident in a rate hike -- CME Group fed funds futures have priced in a more than 99% chance of a 25-basis-point increase. Should the Fed raise rates, it will be the second of three expected hikes this year.

The Fed will also release updated economic growth and rate hike forecasts, while Fed Chair Janet Yellen will hold a press conference mid-afternoon Wednesday. The central bank could also outline how and when it will begin reducing its $4.5 trillion balance sheet. 

"The U.S. economy can easily take this week's hike in its stride," said James Athey, senior investment Manager at Aberdeen Asset Management. ""The debate is really about what happens next. Inflation has softened a little lately and some are saying that the Fed should pause or cease this tightening cycle after this week as a result. That would be a mistake and the Fed should press on."

Banks were outperforming markets on the prospect of an interest rate hike. Goldman Sachs Group Inc.  (GS) led the Dow higher, while Citigroup Inc. (C) , Wells Fargo & Co. (WFC) , Bank of America (BAC) , and JPMorgan (JPM) sported healthy gains. The Financial Select Sector SPDR ETF (XLF) increased 0.6%. 

Citigroup and Wells Fargo are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells C or WFC? Learn more now.

Benchmark indexes, the Nasdaq in particular, have been under pressure after the tech sector fell from recent gains and dragged overall markets down with it. The sudden selloff was partially tied to a note from Goldman Sachs that cautioned investors not to think of the sector as a safe haven. The Nasdaq fell 2.3% over the past two sessions. 

The FAANG stocks --Facebook Inc. (FB) , Apple Inc. (AAPL) , Amazon Inc. (AMZN) , Netflix Inc. (NFLX) , and Alphabet Inc. (GOOGL) (formerly Google) -- were among the hardest hit in recent days after significantly contributing to gains this year. Those stocks have accounted for two-fifths of the S&P 500's gains this year, said John Stoltzfus, chief investment strategist at Oppenheimer. That's "reason enough we'd think for some investors to take a little money off the table in the tech space," he wrote in a note.

FAANG stocks rebounded on Tuesday, driving gains across the tech space. The Technology Select Sector SPDR ETF (XLK) climbed 0.65%. 

Apple, Facebook, and Alphabet are holdings in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL, FB or GOOGL? Learn more now.

A market correction will eventually come, but this selloff wasn't it, argued James "Rev Shark" Deporre over on our premium site for investors, Real Money. Get his insights with a free trial subscription.

Producer prices remained flat in May, according to the Bureau of Labor Statistics, meeting analysts' expectations. Core producer prices, which excludes food and energy, declined by 0.1% last month. Prices over the last 12 months rose 2.4%, or 2.1% when excluding food and energy. 

Crude oil production among the Organization of the Petroleum Exporting Countries rose in May, the oil cartel said Tuesday. Overall OPEC production increased 1%, driven by increases in output in Libya, Nigeria and Iraq. The increases from Libya and Nigeria had been expected after disruptions to operations at their oilfields in recent months. Iraq, however, was a surprise. The country increased production by around 44,000 barrels to more than 4.4 million barrels a day. 

Saudi Arabia will cut its oil exports to the U.S. in a continued effort to reduce a global supply glut cramping prices, The Wall Street Journal reported. State-owned Saudi Arabian Oil Co. will reduce U.S. exports to about 1 million bpd in June, then 850,000 bpd in July. That's the lowest level since 1988, according to EIA data. 

West Texas Intermediate crude added 0.6% to $46.35 a barrel on Tuesday. 

Cheesecake Factory Inc. (CAKE) fell almost 10% after lowering its second-quarter forecasts. The restaurant chain anticipates same-restaurant sales will decline by roughly 1% over its second quarter, down from previous guidance for a 1% to 2% rise. CEO David Overton said the company has experienced "volatility in the week-to-week sales trends, indicative of uncertainty on the part of many consumers" and "pockets of softness as we moved through the quarter." 

Sears Holding Corp. (SHLD)  fell 2% after announcing plans to cut 400 jobs. The strategic restructuring plans are designed to reduce annual costs by $1.25 billion. 

Verizon Communications Inc. (VZ) officially closed its deal to acquire Yahoo! Inc.'s (YHOO) core Internet assets on Tuesday. The $4.48 billion sees Yahoo! absorbed with Verizon's AOL to form a new media entity, Oath. Yahoo! CEO Marissa Mayer has resigned from her position. 

Foot Locker Inc. (FL) moved higher even after a downgrade from Argus. Analyst John Staszak reduced his rating to hold from buy and said it would be "difficult" for the retailer to achieve mid-single-digit comparables growth in the second half of fiscal 2018. Staszak said Foot Locker has a "heavy reliance" on Nike products, the sales of which had recently softened. 

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