The Dow Jones industrial average was up 254.41 points, or 2.25 percent, at 11,538.95. The Standard & Poor’s 500 Index was up 33.29 points, or 2.83 percent, at 1,210.09.
The Nasdaq Composite Index was up 82.26 points, or 3.32 percent, at 2,562.11.
US crude oil rose 2.4 percent, trading above $87 per barrel and extending gains from Friday on the possibility of fresh stimulus for the US economy from the Federal Reserve.
Fed Chairman Ben Bernanke left the door open last week for such stimulus during a speech in Jackson Hole, Wyoming.
Spot gold fell 2.2 percent to below $1,790 an ounce as investors moved away from safe-havens to embrace riskier assets like oil.
The dollar edged 0.3 percent lower against a basket of major currencies.