The Dow Jones Industrial Average rose 8.5% in October, its biggest monthly percentage gain in four years as stocks around the globe rebounded from their late-summer lows.
Investors attributed the broad stock-market gains this month to global central banks, which have either talked up the prospect of further stimulus to boost sagging inflation and growth, or delayed interest rate rises that would tighten monetary policy.
Confidence in the markets was further bolstered by solid quarterly results from large companies.
In addition to the Dow industrials' big gain, the S&P 500 rose 8.3% during the month and the Stoxx Europe 600 climbed 8%, its largest monthly percentage gain since July 2009. Japan's Nikkei rose nearly 10%, the biggest percentage climb since April 2013.
On Friday, the Dow declined 92.26 points, or 0.5%, to 17663.54 and the S&P 500 lost 0.5%, weighed down by financial companies, which pulled back after rallying earlier in the week. The Nasdaq Composite edged down 0.4%.
The Stoxx Europe 600 fell 0.1%, while stocks in Asia mostly fell.
"The rally in October has been fantastic and extremely strong," said David Lyon, global investment specialist in San Francisco for J.P. Morgan Private Bank. "The volatility that reared up in August and September was really driven by two things, China and worries about the Fed and rate hikes," but both fears lessened in October, he said.
This year through mid-August, before the stock market began its steep late-summer swoon, the S&P 500 had been up 2.1%, compared with a 1.7% gain by the Russell 2000 index for shares of small companies. From mid-August through Friday's close, however, the two indexes have sharply diverged. The Russell 2000 has lost 5.2% in that period, while the S&P 500 is only off 1.1%. The 100 largest companies in the S&P 500 are up 0.2%.
On Friday, shares of Chevron rose 1.1% after results for the second-biggest U.S. oil company fell less than Wall Street had expected.
Shares of LinkedIn climbed 11% after the social networking company late Thursday reported a smaller-than-expected third-quarter loss and raised its guidance for the year.
Most of the gains over the past month have come from the largest publicly traded companies, including big moves from Apple, Alphabet–the parent company of Google–and Amazon.com.
"It's a combination of relief that the China troubles aren't going to cause a worldwide recession and decent earnings," said Don Townswick, director of equities at Conning & Co.
Also helping stock performance during the month were continued accommodative measures taken by global central banks. Central banks' ultralow interest-rate policies have boosted stock markets in recent years, and expectations that some central banks could keep the stimulus in place for longer have buoyed investors' appetite for equities.
Investors poured $ 14.6 billion into equity funds in the week ended Oct. 28, according to Bank of America Merrill Lynch, the largest weekly inflow in six weeks.
"Investors have been whipsawed, and I think they've come to the conclusion that, even with comments this week, the Fed is going to be on the sidelines for a while, money will continue to be cheap, and U.S. stocks are really the only place to be in investor eyes," said Paul Nolte, senior vice president and portfolio manager at Kingsview Asset Management.
The Federal Reserve delayed raising interest rates after financial market volatility in September, when many economists had expected the first increase in almost a decade. The Fed said a December rate rise was still on the table at its meeting Wednesday.
Elsewhere, the People's Bank of China cut interest rates last week to boost its slowing economy.
Also, European Central Bank President Mario Draghi last week said that the bank is prepared to expand its stimulus program and potentially cut interest rates further into negative territory as the bloc struggles with low inflation and a tepid recovery.
European stocks have climbed since Mr. Draghi first raised the prospect of further monetary stimulus in September. Sectors most sensitive to a slowdown in China, which saw sharp falls after Beijing weakened its currency in August, have led the recovery.
In Asian markets, Japan's Nikkei rose 0.8% to a two-month high Friday after the Bank of Japan left the size of its bond-buying program unchanged, but lowered its growth and inflation forecasts.
–Chiara Albanese and Christopher Whittall contributed to this article
Write to Corrie Driebusch at corrie.driebusch@wsj.com
Corrections & Amplifications:
Japan's Nikkei Stock Average rose nearly 10% in October, and the Stoxx Europe 600 fell 0.1% Friday. An earlier version of this article misstated the moves. (Oct. 30)
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