Stocks advanced in New York and bargain hunters searched among beaten down tech and retail sector stocks. 

The S&P 500 index surged 1.9% to 3,973.75 and the Nasdaq Composite index rose 1.6% to 11,535.26.  

Inflation worries, stock market valuation contraction, and the looming recession have dominated the trading sentiment for the last two months. 

The S&P 500 index touched a 20% decline mark from the peak in Friday's trading and the Nasdaq Composite has fallen more than 27% in the last six months of trading. 

Banks traded higher after JPMorgan Chase said that the bank is likely to reach its key return targets earlier than previously expected supported by higher lending rates. 

JPMorgan Chase surged 6% to $124.64, Citigroup advanced 6% to $52.85, and Wells Fargo increased 5.04% to $43.77. 

Retail stocks were in focus again ahead of earnings from Costco, Nordstrom, and Dollar General later in the week. 

Costco jumped 3% to $429.00 and the warehouse club is expected to report stronger earnings after the close on Thursday May 26. 

In the fiscal second quarter ending on Feb 13, the retailer reported comparable U.S. same store sales excluding gasoline increased 15.8% from a year ago and slowed to 12.7% in March, and dropped further to 8.1% in April.  

Last week competitors BJ's Wholesale Club and Sam's Club owned by Walmart reported strong sales gains and a surge in membership. 

In the week, Nordstrom, Ralph Lauren, Advance Auto Parts, AutoZone, Dick's Sporting Goods, American Eagle, Ollie's Bargain are expected to release earnings.  

Zoom Video fell 1.2% to $88.59 and the video conferencing company is scheduled to release earnings after the close today. 

In Europe, market indexes gained after investors bid up stocks and corporate activities perked up. 

The business confidence index in Germany rose to 93.0 in May from 91.9 in April, Munich-based Ifo said today. 

The confidence index was expected to decline to 91.4 on the account of rising inflation and slowing sales after improving modestly in April. 

The DAX index advanced 1.4% to 14,175.13, the CAC-40 index rose 1.2% to 6,358.17, and the FTSE 100 index advanced 1.7% to 7,513.08. 

Merger and acquisition news dominated the market sentiment. 

Siemens AG gained after Siemens Energy made a cash tender offer to acquire all outstanding shares in Siemens Gamesa Renewable Energy. 

In Asian markets stocks were subdued after China reported rising infection cases in Beijing over the weekend and the city imposed lockdown in 22 districts. 

Shanghai Composite index lost early gains to close nearly unchanged at 3,146.86 and the Hang Seng index declined 1.2% to 20,470.86. 

Stocks in Mumbai were also under pressure after the Reserve Bank of India is set to lift rates again at the next policy meeting scheduled on June 6. 

The Sensex and the Nifty indexes lost early momentum and closed down after the hawkish comment from the RBI governor confirmed rate hike at the next meeting.