US stocks closed higher on Monday as traders welcomed news that the administration of President Donald Trump may dial down upcoming tariffs.

A White House official told AFP the sector-specific levies "may or may not happen" as planned on April 2, adding that the situation was fluid.

The Dow Jones Industrial Average added 1.4 percent to end trading at 42,583.32, and the broad-based S&P 500 rose 1.8 percent to 5,767.57.

The tech-focused Nasdaq Composite Index jumped 2.3 percent to 18,188.59.

The trade news was "definitely the main cause" of the rise in Wall Street stocks, Steve Sosnick from Interactive Brokers told AFP.

"Investors clearly hate the idea of tariffs," he said. "So any news that implies that the burden of tariffs will be will be lighter than expected will be taken as a positive by the market."

Among individual firms, Elon Musk's Tesla shot up 11.9 percent as traders piled back into the embattled stock.

And United Airlines saw its share price jump 7.2 percent after announcing it was hiking fees on some credit cards and airline lounges. (AFP)