NEW YORK (TheStreet) -- Stocks held at session highs on Monday after weaker-than-expected March jobs data gave hope the Federal Reserve might push a rate hike to later this year.

The S&P 500 was up 0.91%, and the Nasdaq added 0.74%. The Dow Jones Industrial Average jumped 1%, led by a rally in Microsoft (MSFT) shares. 

Microsoft shares spiked 3% after the company received an upgrade to 'outperform' at Wells Fargo. Analysts said foreign exchange challenges have already been priced into the stock's value and that a renewed focus on mobile apps and cloud services will drive sales in its Microsoft Office division.

U.S. nonfarm payrolls added 126,000 jobs in March, well below economists' expectations of 245,000. This marked the first time in 12 months fewer than 200,000 jobs were added to payrolls. The latest poor data supports the narrative of slower growth in the first quarter raises the question as to whether the Fed will put a rate hike on pause until the U.S. economy shows more solid signs of recovery.

"This has to push hiking thoughts out and create a neutral-positioning patience amongst investors who prudently need to assess Q1 in light of potential rebounds effects in Q2," said David Ader and Ian Lyngen, strategists at CRT Capital. "We frankly think more is going on with the softer tone due to the dollar and oil."

The probability of a December rate hike has risen to 57%, according to the CME Group which calculates the likelihood based on fed funds futures prices. The likelihood of a September rate hike decreased to 26% from 33%. 

In a speech in New Jersey on Monday, Fed President William Dudley acknowledged the economic slowdown, predicting growth in the first quarter of only 1% compared to 2.2% over the previous 9 months. However, Dudley suggested that a strong U.S. dollar and lower oil prices may be only transitory pressures on domestic growth.

Crude oil rebounded, reclaiming a level above $50 a barrel after selling off last Thursday. Prices had been under pressure after Iran and six world powers, the U.S. included, reached a tentative nuclear agreement that would lead to the lifting of economic sanctions. Freedom to trade could see Iranian oil flood an already-oversupplied commodity market.

Helping to boost oil on Monday, Saudi Arabia increased its prices for crude sold to Asia by $1, a sign of improving demand. U.S.-produced West Texas Intermediate was up 5.8% to $51.98 a barrel, following Brent crude higher. 

"The main issue with crude oil prices right now is that it is plagued by geopolitical uncertainty, being susceptible to various events," said Daniel Ang, analyst at Phillip Capital. "This is going to give prices a huge amount of volatility and likely to follow these events very closely."

The energy sector was one of the best performers on markets Monday. Major oilers Exxon Mobil (XOM), ConocoPhillips (COP), and Chevron (CVX) were all higher, while the Energy Select Sector SPDR ETF (XLE) jumped 2.3%.

Tesla (TSLA) led the Nasdaq 100 higher after after delivering just over 10,000 vehicles in the first quarter, a record high count. Shares added more than 6%. 

Herbalife (HLF) shares were on watch following reports federal regulators could launch an investigation into its business practices. Details of any potential investigation were still unclear, reported CNBC.

Hudson City Bancorp (HCBK) was the worst performer on the S&P 500, tumbling 8.9% after the Fed informed M&T Bancorp (MBT) its purchase of the New Jersey-based bank will be delayed again. Hudson City had previously expected the sale to close on May 1.

Uniqure (QURE) rocketed nearly 50% higher after Bristol-Myers Squibb (BMY) announced a collaboration deal in which it will acquire a 4.9% stake in the Dutch biotech company.