The Dow Jones industrial average was up 67.21 points, or 0.53 percent, at 12,640.78. The Standard & Poor's 500 Index was up 9.51 points, or 0.72 percent, at 1,335.02. The Nasdaq Composite Index was up 33.33 points, or 1.17 percent, at 2,892.42.
Investors are expected to focus on new home sales data for May. New home sales, measuring the annualized number of new single-family homes that were sold during the previous month, are expected to rise to 346,000, up from 343,000 in April.
U.S. markets bounced back Friday, after a sharp fall Thursday following Moody's downgrade of 15 global banks. The Dow Jones industrial average rose 0.5 percent, the S&P 500 Index was up 0.7 percent and the Nasdaq Composite Index gained 1.2 percent; however, the gains were not enough to push stocks into positive territory for the week.
Meanwhile in Europe, the ongoing political and policy uncertainty stemming from the euro zone debt crisis is expected to loom over markets this week. Investors will be closely watching the June 28-29 European Union summit in Brussels, where the leaders are expected to submit a roadmap on banking and fiscal union for the next 10 years.
Germany has been pressuring the other European countries to commit toward further fiscal and political integration. On the other hand, France has been pushing for the introduction of Eurobonds.
Major European indices were in the red as investors worried that credible set of solutions to the euro zone crisis have not yet been announced. London's FTSE 100 fell by 19.87 points, Germany's DAX 30 index declined 72.51 points and France's CAC 40 moved down by 26.39 points.
Spain is facing rising borrowing cost as its 10-year government bond yields soared to 6.55 percent. Investors are also concerned that the contagion will spread to Italy, which is faced with mounting debt pressures.
Asian markets fell Monday following global cues that urgent measures may be needed for the region to regain global economic momentum.