Small-cap stocks joined their large-cap counterparts Monday at record levels.
The Russell 2000, which is made up of small caps, notched its first all-time high since December after it broke above 1,392.71.
"If the economy is improving, then there is room to rise for these stocks," said JJ Kinahan, chief market strategist at TD Ameritrade. "I think it shows there was a lot of pent-up demand."
Among the index's leaders were shares of Chemours, which rose nearly 13 percent after the company, along with DuPont, agreed to settle several lawsuits related to the leak of a toxic chemical used to make Teflon. The two firms said they will pay $670.70 million in total to settle the lawsuits.
Large caps, meanwhile, continued to build on last week's gains, as the Dow Jones industrial average, and Nasdaq composite also posted record highs amid bullish bets on President Donald Trump's tax plan.
Trump said last week his office will release a "phenomenal" tax plan, having said previously he would slash corporate taxes from 35 percent to somewhere between 15 percent and 20 percent.
"Lowering the overall tax burden on American business is big league ... that's coming along very well," he said at a meeting with airline executives.
The Russell has easily outperformed the three large-cap indexes since the election. This year, however, the small-cap index lags the Dow, S&P and Nasdaq.
Stocks in 2017
Source: FactSet
"I think the first lift-off in small-caps happened because of the excitement over Trump's tax plan," said Nicholas Colas, chief market strategist at Convergex Group. "Year to date, it's a different story."
He added that the rise in stocks this year can be largely attributed to high hopes for Trump's government spending and deregulation plans: "That's why you're seeing large caps outperform this year."
The Dow, S&P and Nasdaq have gained 3.3 percent, 4.1 percent and 7.2 percent, respectively in 2017. The Russell has risen 2.8 percent this year.