Rising tensions between the USA and North Korea have weighed on stocks in recent weeks and raised the prices of gold and bonds.
USA stock index futures climbed as Hurricane Irma came ashore in Florida weaker than anticipated and the perceived threat of a North Korean missile test failed to materialize.
The gains catapulted the Dow up 255 points, or 1.2%, to 22053, on pace for its biggest one-day gain in six months.
The S&P 500 hiked 26.68 points, or 1.1%, to 2,488.11, a record.
The last time the Dow industrials closed above 22000 was August 16, and it hasn't posted a 1% gain since April.
Investors had been bracing for North Korea to test a missile to mark the country's founding day but Pyongyang opted instead to hold a celebration.
"The fear that the hurricane was going to be this massive disaster has receded".
And the analysts think recent currency moves should also be favourable for the firm's British Sugar business, although they added that they are mindful that, given a decline in the world sugar price, it is possible this simply offsets some underlying downside risk to current sugar forecasts. A re-emergence of buying assets perceived as risky, helped to drive up yields in Treasury bonds, with the 10-year Treasury note hitting 2.13% Monday afternoon, compared with 2.05% late Friday.
With Federal Reserve speakers now in a blackout period before next week's policy meeting, the focus this week remains on assessing the impact of natural disasters on US growth and data due on retail spending in the American economy. A reduction in the storm's strength and a shift in its forecast course - there was no direct hit on Miami - meant insured damage estimates were likely to be less than originally anticipated by some analysts. The KBW Nasdaq Insurance index rose 1.8%, almost wiping out its 1.9% drop last week.
Against a basket of currencies, the dollar added 0.15 per cent to 91.490, but that was still uncomfortably close to last week's 2-1/2 year low of 91.011.
The kiwi traded at 72.45 United States cents as at 5pm in Wellington from 72.66 U.S. cents on Friday in NY and down from 73.21 cents in Wellington at the end of last week.
All 11 major S&P 500 sectors rose, led by financial stocks, with insurers advancing as Irma, once ranked as one of the most powerful hurricane recorded in the Atlantic, lost power.
Gold, another traditional haven for money managers, fell 1.1%.
The U.S. dollar hovered at 108.42 yen, up from Friday's 10-month trough of 107.32.