The Dow added more than nine-tenths of a percent, the S&P 500 gained more than 1% and the Nasdaq jumped 1.2%

Investors were monitoring the Israeli war in Gaza, but appeared to be taking more of a risk-on stance, explains Ken Moraif, Founder and CEO of Retirement Planners of America.

"The stock market, in our view, responds to profits, not to human tragedies, misery, wars, etcetera, et cetera. So, you may have noticed that as bad as the events in Israel have been, the market has basically shrugged it off and gone up. Why? Because as we look at those events, right now it appears they're going to be relatively contained within Israel and the Gaza Strip. And if that's the case, then how will that affect profits here in the U.S.? Not very much."

Consumer discretionary led gains among S&P 500 sectors, although all of the sectors were higher on the day.

Third-quarter earnings, now in full swing, are estimated to have increased 2.2% year-over-year, according to LSEG data on Friday.

Charles Schwab shares jumped nearly 5% as the brokerage posted a smaller-than-expected drop in quarterly profit.

And shares of Lululemon Athletica surged 10% as the Canadian sportswear apparel maker was set to join the S&P 500 index this week, replacing Activision Blizzard.

Results from large banks Goldman Sachs, Bank of America and Morgan Stanley are due this week, as well as those from electric vehicle maker Tesla and video-streaming pioneer Netflix.