The benchmark S&P 500 index, which is only 2.2 percent below its record closing high in September, triggered a "golden cross" pattern, in which its 50-day moving average crosses above its 200-day moving average. Many believe the technical signal could portend more gains for stocks in the short term.
Gains in global equities were spurred by data showing that China's manufacturing sector unexpectedly returned to growth in March for the first time in four months.
"The Chinese numbers bounced back, and people are taking more risk today because of it," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
U.S. manufacturing numbers for March were also better than expected, helping investors overlook soft retail sales data for February.
The Dow Jones Industrial Average rose 329.74 points, or 1.27 percent, to 26,258.42, the S&P 500 gained 32.79 points, or 1.16 percent, to 2,867.19, and the Nasdaq Composite added 99.59 points, or 1.29 percent, to 7,828.91.
Concerns about a global economic slowdown have dimmed sentiment since the Federal Reserve announced in late January that its monetary tightening would end earlier than expected, as it cited "cross currents" affecting the economy. The shift in Fed policy drove yields on 10-year Treasury notes below those of three-month bills last week for the first time in more than a decade.
Yields on 10-year notes have since risen back above three-month bill rates and on Monday hit a one-week high. Monday's rise in the 10-year Treasury yield helped lift financial shares, which provided the biggest boost to the S&P 500 among the index's 11 sectors. S&P 500 bank shares jumped 2.9 percent.
"Treasury yields had priced in a gloomy outlook, and now they're unwinding some of that negativity," said Keith Lerner, chief market strategist at SunTrust Advisory Services in Atlanta. "So we're seeing money moving back into cyclical areas, which is why financials are big leaders today."
Concerns about slowing momentum have not entirely dissipated. With the first-quarter corporate earnings reporting season about two weeks away, investors are bracing for what may be the first U.S. profit decline since 2016. Analysts expect quarterly earnings to fall 2 percent, according to Refinitiv data.
Still, on Monday, most S&P sectors rose. Only consumer staples, real estate and utilities shares, which tend to decline as 10-year Treasury yields rise, were in the red.
Auto shares rose after China's State Council said on Sunday that the country would continue to suspend additional tariffs on import of U.S. vehicles and auto parts after April 1.
General Motors Co shares added 1.8 percent and Ford Motor Co shares gained 2.3 percent.
Chipmakers, which draw much of their revenue from China, also rose. The Philadelphia Semiconductor index advanced 2.5 percent.
Shares of Wynn Resorts Ltd jumped 8.4 percent, the most among S&P 500 companies, as March gambling revenue from the Chinese territory of Macau rose from the previous month.
Lyft Inc shares tumbled 11.9 percent to end below their IPO price after brokerage Guggenheim Securities started coverage of the ride-hailing company's shares with a "neutral" rating. Lyft debuted on the Nasdaq on Friday.
Advancing issues outnumbered declining ones on the NYSE by a 2.99-to-1 ratio; on Nasdaq, a 2.11-to-1 ratio favored advancers.
The S&P 500 posted 63 new 52-week highs and no new lows; the Nasdaq Composite recorded 68 new highs and 28 new lows.
Volume on U.S. exchanges was 7.11 billion shares, compared to the 7.47 billion average over the last 20 trading days. Reuters
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