US stocks kicked off the trading week on Monday with a rally after Britain reversed course on an economic plan, while Bank of America was the latest financial company to post solid quarterly results, which lifted optimism about the corporate earnings season.

Britain named Jeremy Hunt finance minister, and he immediately dispelled many of Prime Minister Liz Truss' fiscal measures, which had unnerved markets in recent weeks.

Bank of America Corp shares surged 6.06 percent as the lender's net interest income was buoyed by rising interest rates in the quarter, even though it added $378 million to its loan-loss reserves to buttress against a softening economy.

Fellow financial Bank of NY Mellon Corp also benefited from higher interest rates, and its shares climbed 5.08 percent.

Overall, higher rates boosted interest incomes for lenders in the third quarter, giving investors hope the current earnings season will be able to hurdle a lowered bar of expectations.

The Dow Jones rose 1.86 percent, to 30,185, the S&P 500 gained 2.65 percent, to 3,677, and the Nasdaq added 3.43 percent to 10,675.

Shares of Goldman Sachs, which will post results on Tuesday, advanced 2.24 percent following reports of a plan to combine its investment banking and trading businesses.

Major megacap growth stocks such as Apple, Meta, Amazon and Tesla all rallied. Tesla, Netflix and Johnson & Johnson are among companies expected to report results later in the week. (Reuters)