In a volatile session in which US stocks were lower much of the day, the S&P 500 and the Dow rallied to close higher after last week posting their worst-ever five-day starts to the year.
China's main stock indexes each dropped more than 5 per cent on Monday. Oil prices fell to new 12-year lows, as concerns over China hurt commodity prices broadly.
Noting that weak signs out of China and falling oil prices have recently pressured stocks, Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana, said: "You had both those things happen today and the market managed to finish upward.
"The fact that it did hold up for the same reasons that it seemed to go down last week, that's a victory," Carlson said. "Today was kind of a nice, perhaps, first brick in the bottom being put in place."
The Dow Jones industrial average gained 52.12 points, or 0.32 per cent, to 16,398.57, the S&P 500 was up 1.64 points, or 0.09 per cent, to 1,923.67 and the Nasdaq Composite lost 5.64 points, or 0.12 per cent, to 4,637.99. Energy shares led declines, while the healthcare sector fell 1.2 per cent as Celgene Corp weighed after posting a disappointing financial outlook.
Investors were looking to US corporate earnings to help provide confidence, with major banks reporting later this week, despite expectations for a second consecutive quarter of overall declining earnings.
"We are going to start to get into earnings season and that is going to begin to be the bigger cue for this market," Carlson said.
The pan-European FTSEurofirst 300 index gave up initial gains and ended down 0.4 per cent as commodity shares tracked oil and metals prices lower.
MSCI's broadest gauge of stocks globally slipped 0.4 per cent after registering its biggest weekly decline in more than four years.
Oil prices fell for a sixth straight session to start the new year, as traders cited fears over slowing demand in China.
US crude prices settled down 5.3 per cent at $31.41 a barrel, while benchmark Brent dropped 6 per cent to $31.55 a barrel.
"The focus is still on China and the demand concerns in China moving forward into 2016," said Tony Headrick, an energy market analyst at CHS Hedging LLC.
The US dollar was up 0.3 per cent against a basket of currencies, while the euro fell 0.7 per cent against the dollar.
"Modestly improved risk sentiment was enough to cause the euro to lose some ground against the US dollar," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.
US Treasury yields inched higher in volatile trading. Benchmark 10-year notes were down 12/32 in price to yield 2.1736 per cent, from 2.131 per cent late on Friday.
Copper prices fell 2.2 per cent to 6-1/2-year lows as the Chinese stock declines reinforced worries about demand in the world's biggest consumer of industrial metals.
Spot gold fell 0.8 per cent but still hovered at more than two-month highs.
The 19-market Thomson Reuters CoreCommodity Index sank 2.6 per cent to a 13-1/2-year low.
© Thomson Reuters 2016