U.S. stocks rebounded Monday to close sharply higher, with the Dow Jones Industrial Average surging more than 260 points. A rally in biotechnology stocks boosted the Nasdaq composite, driven by merger activity, while the S&P 500's energy sector gained more than 2 percent after geopolitical tensions eased in the Middle East over a nuclear deal in Iran. 

Economists are looking ahead to a series of data points released on Tuesday, including the Case-Shiller home price index for February, issued at 9 a.m. EDT. The Conference Board will publish its consumer confidence index for March at 10 a.m. EDT. 

The Dow Jones Industrial Average (INDEXDJX:.DJI), which measures the share prices of 30 large industrial companies, soared 263.65 points, or 1.49 percent, to close at 17,976.31. The Standard & Poor's 500 (INDEXNASDAQ:.IXIC) added 25.22 points, or 1.22 percent, to end at 2,086.24. The Nasdaq composite (INDEXSP:.INX) gained 56.22 points, or 1.15 percent, to finish at 4,947.44.

Monday's rally also helped push the blue-chip Dow back in positive territory for the year. The Dow has gained 151 points, or 0.85 percent so far in 2015, while the S&P 500 has risen 27 points, or 1.32 percent. However, the Nasdaq composite has jumped more than 211 points, or 4.46 percent. 

All three major indexes kicked off the week with a bang on hopes for additional stimulus measures in Asia that sent Chinese stocks to seven-year highs. Meanwhile, merger and acquisition activity in the health care space also helped spur a rally, with the Nasdaq's Biotechnology index (INDEXNASDAQ:NBI) gaining more than 1 percent. 

U.S. biotechnology firm Cellular Dynamics International Inc. (NASDAQ:ICEL) surged more than 106 percent Monday to close at $16.42 on the Nasdaq after Fujifilm Holdings Corp. agreed to acquire the U.S. biotechnology firm for $307 million. Meanwhile, shares of Catamaran Corp. (NASDAQ:CTRX) skyrocketed more than 23 percent Monday to $59.83 after UnitedHealth Group Inc. (NYSE:UNH) announced it is buying the pharmacy benefits manager for $12.8 billion, or $61.50 per share, to combine it with its OptumRx unit. Shares of UnitedHealth Group gained more than 2 percent to end the regular trading session at $121. 

Separately, Israel's Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) is buying U.S. drug developer Auspex Pharmaceuticals Inc. (NASDAQ:ASPX) for $101 per share, or $3.2 billion in cash, sending shares of Auspex soaring more than 41 percent to end at $100.36. Biopharmaceutical company Hyperion Therapeutics Inc. (NASDAQ:HPTX) is being bought by Ireland's Horizon Pharma (NASDAQ:HZNP) for $1.1 billion in cash, or $46 per share. Shares of Horizon Pharma surged more than 18 percent to close at $25.78.

Oil prices extended losses for a second straight session Monday in the midst of Iran negotiating a deal for its nuclear program that could end Western sanctions. However, the deal would allow the Organization of the Petroleum Exporting Countries (OPEC) member to ship more crude, which investors fear is an already oversupplied market as U.S. oil stockpiles continue to hit record highs.

After the U.S. State Department announced Monday there is a 50/50 chance of a framework agreement with Iran, West Texas Intermediate crude, the benchmark for U.S. oil prices, fell 0.33 percent to $48.71 a barrel on the New York Mercantile Exchange. Brent crude, the benchmark for global oil prices, edged up 0.07 percent to $56.45 a barrel, for April 15 delivery, on the London ICE Futures Exchange.