The S&P/TSX composite index gained 52.05 points to 15,412.60, while the Canadian dollar was 0.01 of a U.S. cent lower at 81.77 cents.
In the U.S., the Dow industrials surged 208.63 points to 18,034.93, while the Nasdaq jumped 62.79 points to 4,994.60 and the S&P 500 index added 19.22 points to 2,100.40.
The gains come after some hefty losses, with the Dow plunging nearly 300 points on Friday.
"U.S. stocks are bouncing today given the fact that we had a pretty oversold situation over the weekend, plus you had monetary policy, even more doveish, out of China," said Brian Belski, chief investment strategist at BMO Capital Markets.
"It was just one of those classic bargain shopping sprees . . . in America, where people decided to jump back in."
The stock market gains follow a weekend decision by China's central bank to cut the required reserve ratio for banks by one percentage point. The move is expected to free up roughly $200 billion for lending to stimulate the Chinese economy.
China is a major consumer of oil and metals, both heavily weighted sectors on the TSX.
It's a big week for earnings in the United States with close to one-third of the companies on the S&P 500 reporting first-quarter results. Most analysts have predicted that overall earnings will be lower in the quarter, the first time that has happened since 2009.
But several big companies, including toy maker Hasbro, banker Morgan Stanley and oil services firm Halliburton all reported earnings Monday that beat estimates.
"Corporate America continues to under promise and over deliver," said Belski, adding that the sharp decline in energy prices is weighing on U.S. earnings.
"If you would have taken out energy from the fourth-quarter earnings, earnings would have been up 10 per cent in America. If you take out energy in the first quarter, earnings would have been up five per cent. So I think a lot of what's going on here is energy. I'm not going to blame energy in totality. But at the end of the day this correction in commodities is really shocking a lot of people."
North of the border, Rogers Communications Inc. (TSX:RCI.B) reported after markets closed that first-quarter net income fell 17 per cent, with adjusted earnings of 53 cents per share falling 10 cents short of analyst estimates.
Canadian National Railway (TSX:CNR), also reporting after markets closed, increased its net profits by 13 per cent to $704 million or 86 cents per share in the first quarter, beating estimates by a penny per share.
On the commodity markets, the May crude contract up 64 cents at US$56.38 a barrel, while the June gold contract was down $9.40 at US$1,193.70 an ounce. May copper was off four cents at US$2.73 a pound.