NEW YORK -- US stocks opened higher on Monday after Canada and the United States announced Sunday night that they and Mexico had reached a new deal to replace the North American Free Trade Agreement (NAFTA).

Shortly after the opening bell, the Dow Jones Industrial Average jumped 167.66 points, or 0.63 percent, to 26,625.97. The S&P 500 was up 14.15 points, or 0.49 percent, to 2,928.33. The Nasdaq Composite Index climbed 4.38 points, or 0.05 percent, to 8,046.35.

Canada and the United States reached an agreement, alongside Mexico, on a new free trade deal called the United States-Mexico-Canada Agreement (USMCA), according to a joint statement from the United States and Canada on Sunday. The USMCA will replace the 24-year-old NAFTA.

Market sentiment was bolstered as investors expected the new accord would help remove uncertainties, strategists noted.

US stocks posted mixed results in the week ending Sept 28 as investors digested Federal Reserve's latest decision on US monetary policy as well as major economic data.

For the week, the Dow Jones Industrial Average was down 1.1 percent, the S&P 500 erased 0.5 percent and the Nasdaq Composite Index rose 0.7 percent.