Some of the stocks recovery may be attributed to investors buying stocks once again in the belief that the market had bottomed out or had overshot in pricing in global risks.
In any case, Friday was a strong session for Wall Street, with the Dow recording gains of 3.29 percent, while the S&P 500 jumped 3.43 percent and the Nasdaq 4.26 percent.
Goldman Sachs researchers expect a bounce in equity markets in 2019.
"If, as we expect, global economies slow down in 2019 but avoid recession, and U.S. interest rates peak, there is likely to be a risk rally," they said in a note.
Analysts at Bank of America Merrill Lynch said that with 2,055 of 2,767 U.S. and global companies in a bear market, it might be time to buy.
"Our Bull & Bear Indicator has fallen to an 'extreme bear' reading, triggering the first 'buy' signal for risk assets since June 2016," they wrote in a note.
The U.S. dollar -- which served as a safe haven in 2018 -- fell broadly, with the euro edging up to $1.1442 and the dollar index easing 0.3 percent to 95.90.
The currency could not even hold early gains on the yen, lapsing back to 108.21.
Gold benefited from the diminished risk of U.S. rate hikes and rose half a percent to $1,291.12, just off a six-month high.
Oil prices firmed after Brent bounced about 9.3 percent last week. The crude benchmark rose 118 cents on Monday to $58.24 a barrel, while U.S. crude futures gained 93 cents to $48.89.
