Ten of the 11 major S&P 500 sectors advanced in early trading, with the energy sector leading gains. Megacap growth and technology companies such as Apple and Microsoft also advanced 1.5% each.
The S&P 500 was up 54.78 points, or 1.53%, at 3,640.40, and the Nasdaq Composite was up 127.33 points, or 1.20%, at 10,702.95.
"These are not huge gains, but that does not make them any less welcome -- certainly not after the month that just concluded," said Briefing.com analysts Patrick J O'Hare.
"The understandable question on everyone's mind is, will they last? After all, there is some riptide below the surface."
"We could see a rebound in the beginning of the quarter simply due to the low sentiment and the lows that were reached at the tail-end of the last quarter," said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.
Investors concerned
Investors remain concerned about the US Federal Reserve's aggressive policy path as it battles to bring down the highest inflation in 40 years, as well as the impact of rising interest rates on the financial sector.
Global banking giant Credit Suisse has been trying to reassure markets that it has sufficient capital to weather a planned restructuring, but jitters sent the stock sinking on Monday.
Meanwhile, major automakers are expected to report modest declines in US new vehicle sales, but analysts and investors are concerned that a darkening economic picture, not inventory shortages, will lead to a drop in future car sales.
Tesla shares fell 7% after it sold fewer-than-expected vehicles in the third quarter as deliveries lagged way behind production due to logistic hurdles. Peers Lucid Group fell 2% and Rivian Automotive 3.9%.
Oil majors Exxon Mobil and Chevron Corp rose more than 3%, tracking a jump in crude prices as sources said the Organization of the Petroleum Exporting Countries and its allies are considering their biggest output cut since the start of the coronavirus pandemic.
