U.S. stocks surged as investors regained confidence that the midterm election results will be positive for the economy following a sharp selloff last week.

The Dow Jones Industrial Average jumped 1104.02 points, or 2.15%, to 52389.75. The S&P 500 gained 173.08 points, or 2.35%, to 7549.94. The tech-heavy Nasdaq Composite rose 673.71 points, or 2.74%, to 25253.14.

"It is not uncommon for markets to see post-election volatility as investors reassess their priors on the policy backdrop, but markets have historically recovered over the long term," Glenmede analysts said in a note.

Stocks initially gained after the Democrats won the House and Senate in the midterms, but retreated later in the week. Over the past four trading days, the Dow has swung 1,000 points or more three times. It has not moved that much in three out of four trading days since the Covid-19 outbreak in March 2020.

Investors' positivity Monday was enough to withstand bad news for tech heavyweight Nvidia. Nvidia shares dropped 4.3% to $178.67 after the company said it was investigating whether Chief Executive Jensen Huang was the target of a Chinese spy operation. The probe stems from the chief executive's romantic relationship with an executive suspected of working for Chinese intelligence.