U.S. equities kicked off the week on the right foot, closing at record highs Tuesday following a key naming by the Trump administration and corporate earnings.
The Dow Jones industrial average rose more than 100 points, with Boeing and UnitedHealth contributing the most gains. The S&P 500 gained 0.6 percent, with real estate leading all sectors higher.
"The fundamental backdrop continues to support us while we wait for tax reform and deregulation," said Art Hogan, chief market strategist at Wunderlich Securities. "Investors have been patient, but at some point that patience will run out; just not today."
The Nasdaq composite advanced 0.47 percent. The Russell 2000, which is made up of small-cap stocks, also reached new records.
The U.S. stock market was closed Monday in observance of the Presidents' Day holiday.
"I think this is mainly about the earnings," said Sam Stovall, chief investment strategist at CFRA Research. "While the appointment of General McMaster is a positive, it still boils down to whether the market will get the kind of policy it expects." He also said the market could be "chasing itself higher in a fear-of-missing-out mindset."
Dow, S&P, Nasdaq and Russell since US election
The White House announced Monday that Lieutenant General H. R. McMaster will become the new national security advisor. McMaster replaces Michael Flynn, who resigned last week.
"This is very, very good for the market," said Quincy Krosby, market strategist at Prudential Financial, adding McMaster's naming helps assuage some of the concerns that President Donald Trump's administration is in disarray.
Investors also digested several corporate quarterly results, including retail giants Macy's and Home Depot. Macy's posted mixed results, beating earnings per share estimates but falling short on sales, while Home Depot exceeded Wall Street expectations.
"The positive guidance out of Home Depot points to a buoyant consumer," said Krosby.
Stocks — which also managed record levels last week — have been on a rip-roaring rally since the U.S. election, as investors have piled on to bets that the new administration will be able to enact significant corporate tax cuts and deregulation. The three large-cap indexes and the Russell have gained more than 10 percent since the election.
Following equities higher has been the U.S. dollar, which traded about half a percent higher against a basket of currencies, as market expectations for tighter monetary policy have increased.
"Although the current March hike madness theme could uplift the Dollar higher in the short term, the visible lack of commitment to a timeline in raising US rates may swiftly cap upside gains," said Lukman Otunuga, research analyst at FXTM, in a note.
The dollar index, which tracks the U.S. currency's performance against six others, is down about 1 percent this year but has gained nearly 4 percent since Nov. 8.