The broad S&P 500 index increased 0.9 percent, the Dow Jones industrial index rose 0.8 percent while Nasdaq's technology-heavy composite index lifted 1.5 percent.
Oil prices fell after The Wall Street Journal's reports that Iran has sent signals that the country wants to scale down the hostilities with Israel and return to talks about its nuclear technology program.
Investors are now waiting for the US central bank Federal Reserve to come with its interest rate decision later in the week.
Most investors and economists expect the Fed to leave the interest rate unchanged. More interesting is the forecast to be published on how the Fed views the economy and interest rates in the coming years. Bank of America expects the forecast to show an interest rate cut this year and three cuts in 2026.
US President Donald Trump has formally approved a merger between the US steel company US Steel and the Japanese Nippon Steel. US Steel's share rose 5.1 percent.
