On a shortened trading day, Wall Street finished mixed, with the blue-chip Dow and the S&P both a hair's breadth below record closes while faltering tech stocks took the Nasdaq lower.
The Dow Jones Industrial Average added 0.6 percent and the broader S&P 500 rose 0.2 percent, with investors rotating out of the tech sector and into financials. The tech-heavy Nasdaq suffered the consequences, diving 0.5 percent on the first trading day of the second quarter.
Wall Street behemoths Goldman Sachs and JP Morgan Chase were among the Dow's leaders, each adding more than two percent.
Art Hogan of Wunderlich Securities told AFP banks were boosted by rising yields on 10-year US Treasury bonds.
"That is helping the financials," he said.
New figures on Monday also showed the US manufacturing sector expanding in June, perhaps helping investors shrug off disappointing but volatile economic data on construction spending, which was flat for the month.
As the Gulf's diplomatic crisis over Qatar dragged on, oil prices rose for an eighth straight trading day, with light-sweet crude for August delivery closing up more than a dollar at $47.07 in New York. Supermajors Chevron and Exxon saw their shares gain 1.9 percent and 1.7 percent, respectively.
London, Frankfurt and Paris all moved higher, with the latter adding a strong 1.5 percent, rebounding from heavy declines ahead of the weekend.
- A 'dead-cat' bounce ? -
Eurozone markets also reacted well to regional manufacturing PMI data, but the UK's manufacturing reading came in at a three-year low of 54.3, which "doesn't bode well for the country's second-quarter growth," according to Spreadex analyst Connor Campbell.
Exchange markets were somewhat subdued ahead of the US holiday but the dollar nevertheless posted strong gains against a basket of rival global currencies. By 2000 GMT, the dollar Index had gained 0.6 percent from Friday's reading.
The US currency last week tumbled after central banks in Europe, England and Canada indicated that the age of cheap cash -- in place since the financial crisis -- was drawing to a close as the world economy gets back on track.
During the first half of the year, the euro jumped about 10 percent against the dollar, while the pound gained almost as much from its January lows. But some analysts said the dollar's recovery on Monday could be short-lived.
"After last week's breakdown, the small rebound at the start of this week could prove to be a dead-cat bounce," said Fawad Razaqzada, Market Analyst at Forex.com.
Elsewhere Monday, Tokyo's Nikkei stocks index edged up 0.1 percent, helped by a slightly weaker yen and a pick-up in confidence among Japanese businesses, traders said. But investors were spooked by a huge defeat for Prime Minister Shinzo Abe in Tokyo assembly elections.
Shanghai added 0.1 percent following a better-than-expected private survey showing Chinese manufacturing expanded last month.