The Asian nation successfully tested a hydrogen bomb on Sept. 3, sparking outrage from the international community. The U.N. Security Council unanimously voted to cap North Korea's crude oil imports and ban its textile exports on Monday night.
Meanwhile, damage estimates for Hurricane Irma, a storm that was once a Category 5 hurricane, were broadly lowered.
These factors helped the Dow, S&P and Nasdaq rally on Monday, as they advanced more than 1 percent.
Investors also set their sights on Washington after Treasury Secretary Mnuchin said he was "hopeful" that tax reform would be accomplished by year's end, adding the administration is thinking about backdating reform to Jan. 1.
Backdating "is still something we are considering and it would be a big boon for the economy," he said at the Delivering Alpha conference presented by CNBC and Institutional Investor.
U.S. stocks initially jumped after President Donald Trump's election on hopes of tax reform, deregulation and infrastructure spending. But the administration has faced several hurdles trying to move its agenda forward, including in-party fighting.
"People are in wait-and-see mode in terms of tax reform. We get a bit of a pop every time it gets mentioned, but I think the market is in a bit of disbelief," said Boston Private's Pavlik.
Elsewhere, Apple held its annual consumer products event, where it unveiled three new iPhone models and an Apple Watch that doesn't need an iPhone to work.
Shares of Apple closed 0.4 percent lower, after alternating between gains and losses for most of the session. For the year, the stock has jumped about 40 percent.