The S&P 500 hit a four-month high and all three major indexes rose 1 percent as Wall Street sought to extend a three-week rally ahead of Tuesday's monetary policy meeting by the Federal Reserve.

Trading sources also said crude futures were being supported by expectations that the week-long shut down of Enbridge Inc.'s Canada-to-US crude oil pipeline restarted on Friday may have pushed US crude inventories lower last week.

US crude for October delivery rose $1.47, or 2.0 percent, to $75.13 per barrel at 12:05 p.m. EDT (1605 GMT), trading from $73.32 to $75.45. The October contract expires on Tuesday.

US November crude rose $1.56, or 2.08 percent, to $76.48 a barrel.

ICE Brent for November rose $1.31 to $79.52.

US crude prices posted their biggest percentage drop in five weeks last week, declining on the expected Friday restart of the pipeline that carries nearly one-third of Canadian crude shipped to the United States.

High US oil inventories have also weighed on oil prices.

Since May, crude prices have been hemmed in between the $64.24 intraday low on May 20, the weakest front-month price since July 30, 2009, and the 2010 peak of $87.15 hit May 3.

World stocks jumped and the dollar slipped on Monday.

Gold hit record highs for the fourth consecutive day, benefiting from dollar weakness and concerns that any additional stimulus could prove inflationary.

The Dow Jones Industrial Average gained 95.59 points, or 0.90 percent, at 10,703.44, while The Standard & Poor's 500 Index rose 10.42 points, or 0.93 percent, to 1,136.01. The Nasdaq Composite Index was up 21.19 points, or 0.92 percent, at 2,336.80.

European shares rebounded, with the FTSEurofirst index closing 1.35 percent higher on hopes that the economy will not slip back into recession.

Energy companies Total, ENI, BP and Royal Dutch Shell rose between 2 and 2.9 percent, as crude oil prices rose more than 1 percent.

The MSCI All-Country World index climbed 0.96 percent, while the MSCI Emerging Market stock index was 0.59 percent higher.

Prospects of more quantitative easing, often seen as negative for currencies, caused the US dollar to weaken 0.21 percent against major currencies, according to a benchmark index.

The euro gained 0.25 percent to $1.3077. Against the Japanese yen, the dollar was down 0.19 percent at 85.68.

The yen has been trading at a tight range since the Bank of Japan intervened in the foreign exchange market last week to stem further currency appreciation.

The Australian dollar hit a two-year high after hawkish comments from a policymaker.

The Aussie rose more than 1 percent earlier to $0.9469, its strongest since mid-2008, after Reserve Bank of Australia Gov. Glenn Stevens suggested Australian interest rates would rise further.

Gold, which tends to benefit from economic uncertainty because many investors see it as a safe-haven asset, rose as high as $1,283.70 an ounce, eclipsing the previous all-time peak of $1,282.75 struck on Friday.