The Dow Jones was up 0.4 percent at 26,916. The S&P 500 rose 0.5 percent to 2,976, while the Nasdaq jumped 0.8 percent to 7,999.
The closely-watched Caixin manufacturing index rose from 50.4 to 51.4 in September, despite the ongoing trade war with America.
Analysts also cited comments from Trump administration officials that played down the likelihood of potential new restrictions on Chinese investment. Stocks fell on Friday following reports the White House was weighing a plan to delist Chinese companies from US stock markets.
Both the Dow and S&P 500 finished with modest gains for the quarter, while the Nasdaq edged lower.
Stocks were battered in August after the US and China announced new tariff measures against each other, but markets rebounded in September amid more conciliatory messages from both sides.
Investors are looking ahead to the resumption of talks between Beijing and Washington in October, said Quincy Krosby, chief market strategist of Prudential Financial.
The talks are “clearly a positive for the markets because the effect it has on the world economy is paramount going into the last quarter” he said.
Among individual stocks, Apple jumped 2.4 percent after a note from JPMorgan Chase lifted its price target, arguing that the solid outlook for iPhone sales has been underestimated.
US economic indicators this week include the Institute for Supply Management’s reports on manufacturing and services sector activity, as well as the September jobs report from the Department of Labour. (AFP)