US close: Dow Jones reverses Friday's losses

Wall Street stocks recorded solid gains on Monday as major indices bounced back from their worst week since October.

At the close, the Dow Jones Industrial Average was up 1.76% at 33,876.96 and the S&P 500 was 1.40% firmer at 4,224.79, while the Nasdaq Composite saw out the session 0.79% stronger at 14,141.48.

The Dow Jones closed 586.89 points higher on Monday, reversing losses recorded on Friday after news that the Federal Reserve had raised its inflation expectations and forecast rate hikes in 2023 earlier in the week continued to weigh on sentiment.

The effects of the Fed's policy meeting last week were still being felt across global markets at the start of the new week, with stocks and bond yields having fallen as a result of the news amid a sharp repricing of risks due to the central bank raising rates.

Reopening plays such as Royal Caribbean and Boeing traded higher, while commodity stocks, which were hard hit during last week's selloff, like Exxon and Chevron also ended the session in the green.

On the macro front, the Chicago Federal Reserve's national activity index increased to 0.29 in May from –0.09 in April, with three of the four broad categories of indicators used to construct the index making a positive contribution last month. The index's three-month moving average rose to 0.81 in May from 0.17 in April.

No major corporate earnings were released on Monday.