NEW YORK, New York - U.S. stocks rallied on Monday on hopes China and the United States are on the brink of reaching a deal to settle trade differences. "I have a lot of respect for President Xi, and we are going to come away with the deal," U.S. President Donald Trump told reporters on Air Force One on Monday. 

"If we end up with some sort of a favorable trade agreement between the U.S. and China, then the two largest trading partners are once again working together. That would be a very positive sign," Sam Stovall, chief investment strategist at CFRA Research, told CNBC Monday. "A lot of the forecasts for technology have been without the benefit of China, so once you can add China back into the equation, that would probably be fairly optimistic for the markets," he said.

All the U.S. stock indexes closed sharply higher on Monday, lifted by strong gains in technology and growth-oriented stocks, while Canada's main index ended slightly lower amid weakness in energy shares.

The Standard and Poor's 500 surged 83.44 points, or 1.23 percent, to close at 6,875.13, marking one of its strongest sessions this month as investors cheered solid corporate earnings and renewed confidence in the economic outlook.

The Dow Jones Industrial Average advanced 337.47 points, or 0.71 percent, to finish at 47,544.59, supported by strength in blue-chip industrial and financial shares.

The NASDAQ Composite jumped 432.59 points, or 1.86 percent, to 23,637.46, as major technology and semiconductor stocks extended their recent rally following upbeat sector forecasts.

Market sentiment improved after recent data suggested cooling inflation and solid consumer spending in the United States, fuelling expectations that the Federal Reserve may maintain a steady policy stance in the coming months.

Overall, Monday's session reflected renewed investor optimism, particularly in growth and technology shares, as Wall Street continued to recover from recent volatility.

U.S. Dollar Mixed in Global Trading as Australian and New Zealand Currencies Surge

The U.S. dollar traded mixed against major currencies on Monday, easing slightly against the euro and sterling but holding steady against the yen and Swiss franc. Commodity-linked currencies, including the Australian and New Zealand dollars, posted notable gains as risk appetite improved in Asian markets based on an increasing likelihood of China and U.S. reaching agreement on a trade deal.

The euro edged higher, with the EUR/USD pair rising 0.18 percent to 1.1646, as traders looked ahead to upcoming European inflation data for further clues on the European Central Bank's next policy move.

The British pound also strengthened, with GBP/USD gaining 0.16 percent to 1.3331, supported by improved investor sentiment and stable gilt yields.

In contrast, the U.S. dollar was steady against the Japanese yen, inching up 0.04 percent to 152.93, as investors weighed Japan's potential intervention risks amid the yen's persistent weakness. Against the Swiss franc, the greenback added 0.04 percent, with USD/CHF at 0.7954.

The Canadian dollar was little changed, with USD/CAD up a modest 0.01 percent to 1.3993, as oil prices remained range-bound after recent gains.

The strongest performers on the day were the Antipodean currencies. The Australian dollar rose 0.68 percent to 0.6553 against the U.S. dollar, buoyed by rising equity markets and firm commodity demand. The New Zealand dollar advanced 0.38 percent to 0.5767, supported by renewed investor confidence in regional growth prospects.

Global Stocks Mostly Higher as Asian and European Markets Post Gains; Japan and South Korea Lead Advances

World equity markets closed mostly higher on Monday, with strong gains in Asia helping to lift sentiment across regions. Japan's Nikkei 225 and South Korea's Kospi surged sharply, while European indices ended the day modestly higher amid cautious optimism over corporate earnings and interest rate expectations.

In Canada, the S&P/TSX Composite Index slipped 77.31 points, or 0.25 percent, to 30,275.76, weighed down by losses in energy and materials sectors, even as financial and industrial stocks showed relative resilience.

In London, the FTSE 100 edged up 8.20 points, or 0.09 percent, to close at 9,653.82, supported by energy and banking shares. In Frankfurt, the DAX rose 68.89 points, or 0.28 percent, finishing at 24,308.78, while in Paris, the CAC 40 added 13.55 points, or 0.16 percent, to settle at 8,239.18.

The Euro Stoxx 50 advanced 36.56 points, or 0.64 percent, to 5,711.06, and the Euronext 100 Index climbed 6.08 points, or 0.35 percent, to close at 1,720.63. Belgium's BEL 20 was little changed, up just 0.31 points, or 0.01 percent, to 4,994.60.

Across Asia, markets recorded strong advances. The Nikkei 225 in Tokyo jumped 1,212.67 points, or 2.46 percent, to close at 50,512.32, driven by technology and semiconductor stocks. The Kospi Composite Index in Seoul rallied 101.24 points, or 2.57 percent, to 4,042.83, extending recent gains as investors bet on continued export growth.

Hong Kong's Hang Seng Index climbed 273.55 points, or 1.05 percent, to 26,433.70, while Taiwan's Weighted Index rose 461.37 points, or 1.68 percent, to 27,993.63. In Shanghai, the SSE Composite Index gained 46.63 points, or 1.18 percent, to close at 3,996.94.

In Australia, the S&P/ASX 200 advanced 36.60 points, or 0.41 percent, to 9,055.60, while the broader All Ordinaries added 34.70 points, or 0.37 percent, to finish at 9,351.90. New Zealand's S&P/NZX 50 Index edged up 14.49 points, or 0.11 percent, to 13,391.59.

Elsewhere in the region, Singapore's Straits Times Index gained 18.09 points, or 0.41 percent, to 4,440.30; Malaysia's FTSE Bursa Malaysia KLCI rose 5.11 points, or 0.32 percent, to 1,618.38; and India's S&P BSE Sensex advanced 566.96 points, or 0.67 percent, to close at 84,778.84.

In contrast, Indonesia's Jakarta Composite Index dropped sharply, losing 154.57 points, or 1.87 percent, to 8,117.15, as profit-taking weighed on recent high-performing stocks.

Markets in the Middle East and Africa were mixed. Israel's TA-125 slipped marginally by 0.57 points, or 0.02 percent, to 3,310.27, while Egypt's EGX 30 Price Return Index rose 60.00 points, or 0.16 percent, to 38,162.00. In Johannesburg, South Africa's Top 40 USD Net TRI Index declined 111.83 points, or 1.74 percent, to 6,317.95.

Overall, Monday's trading session reflected a broadly positive global mood, with Asian equities leading the way, though gains in Europe were restrained as investors continued to assess inflation data and central bank outlooks.

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