Equities and US Treasuries moved higher, while the US dollar fell, after a report showing a surprise drop in US retail sales in June, lowering expectations the Federal Reserve will hike interest rates in September.
In late afternoon trading in New York, the Dow Jones Industrial Average added 0.47 per cent, the Standard & Poor's 500 Index rose 0.52 per cent, while the Nasdaq Composite Index gained 0.84 per cent.
A Commerce Department report showed retail sales declined 0.3 per cent in June, the weakest since February, following a 1.0 per cent gain in May that was smaller than previously reported.
"The underlying tone of this report suggests that the recovery is beginning to show some signs of strain," Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters. "If anything it will temper, at the margin, any consideration for a September rate hike."
All eyes are on US Federal Chair Janet Yellen who is set to deliver her semiannual testimony to Congress on Wednesday and Thursday. Last week she said she still expects the Fed to lift rates this year.