U.S. equities closed slightly higher on Monday as Wall Street looked ahead to a key speech from President Donald Trump.
"For the speech tomorrow night, people are looking to maybe hear more details" about policies, said Randy Warren, chief investment officer at Warren Financial. "He's delivered on most of his campaign promises. Now it's time for him to deliver on the tough ones."
Trump is set to speak at a joint Congress session on Tuesday, and investors will look for clues about the administration's plans for tax reform and deregulation.
"What I'm watching out for is whether his focus is on the pro-growth policies or on the populist message," said Dan Miller, director of equities at GW&K Investment Management.
The Dow Jones industrial average gained about 15 points, hitting a new all-time intraday high, with Boeing and Goldman Sachs contributing the most gains. The index also closed at a record high for a 12th straight session, its longest streak since 1987.
"People are going to be cautious because the market has run up on expectations of tax cuts and deregulation," said Peter Cardillo, chief market economist at First Standard Financial. "I think we'll see a bit of a repeat of last week."
The S&P 500 also hit all-time intraday and closing highs, rising 0.1 percent, with energy rising 0.8 percent to offset losses in telecoms. The Nasdaq composite gained 0.28 percent.
The major stock indexes recorded fresh record highs last week but did not post gains as strong as the week before.
"We have transitioned from an interest-rates driven bull market to an earnings-driven bull market. That's the main story," said Jeffrey Saut, chief investment strategist at Raymond James. "I think we've got another six, seven or eight years in this bull market. If you run the models ... you could see 4,000 on the S&P."
Trump said Monday at a meeting with governors the administration will "make the government lean and accountable." At around the same time, an Office of Management and Budget official told reporters that Trump's first budget will call for a $54 billion hike in defense spending and an equal cut in what his administration deems lower priority programs.
Shares of Northrop Grumman, Raytheon and Lockheed Martin all climbed higher on the news.
"Policy updates and implementations of those orders are something which investors seek. The hopes are quite high and the risk of disappointment is equally dangerous for the stock market in the US which had another record high on Friday," said Naeem Aslam, chief market analyst at Think Markets, in a note.
In economic news, durable goods orders rose 1.8 percent in January, slightly above the expected 1.7 percent increase. Pending home sales, meanwhile, dropped 2.8 percent in January to their lowest level in a year.
"The persistent rise in home prices well above the rate of inflation on top of a higher cost of funding have combined to moderate home sales," said Peter Boockvar, chief market analyst at The Lindsey Group.
Also, Dallas Federal Reserve President Robert Kaplan, a voting member on the central bank's policymaking committee, reiterated his view that a rate hike should come sooner rather than later.
The Fed is scheduled to hold its next monetary policy meeting March 14, with the possibility of a rate hike high enough to keep investors intrigued. Market expectations for a rate hike in March are around 30 percent, according to the CME Group's FedWatch tool.
U.S. Treasury yields rose after hitting a five-week low on Friday, with the benchmark 10-year note yield near 2.37 percent and the two-year note yielding 1.2 percent.
The U.S. dollar erased earlier losses to trade 0.1 percent higher against a basket of currencies, with the euro near $1.059 and the yen around 112.72.
In corporate news, Goldman Sachs downgraded Tesla to "sell" from "neutral," delays in the large-scale production of the Model 3. Tesla's stock declined 4.19 percent in afternoon trade.
Wall Street also listened to CNBC's "Squawk Box" wide-ranging interview with Warren Buffett, the legendary investor and CEO of Berkshire Hathaway. In it, Buffett said the stock market is not in bubble territory, adding that prices are "on the cheap side" given the low interest rates.
The Dow Jones industrial average rose 15.68 points, or 0.08 points, to close at 20,837.44, with Caterpillar leading advancers and Verizon the top decliner.
The gained 2.39 points, or 0.1 percent, to end at 2,369.73, with energy leading six sectors higher and telecommunications lagging.
The Nasdaq composite advanced 16.59 points, or 0.28 percent, to close at 5,886.90.
About nine stocks advanced for every five decliners at the New York Stock Exchange, with an exchange volume of 904.88 million and a composite volume of 3.537 billion at the close.
—CNBC's Jacob Pramuk contributed to this report.
On tap this week:
Earnings: Target, Weight Watchers, AutoZone, NRG Energy, Blue Buffalo, Bank of Nova Scotia, Bank of Montreal, Steve Madden, Salesforce.com, United Health Services, SeaWorld
8:30 a.m. Q4 GDP (second read)
8:30 a.m. Advance economic indicators
9:00 a.m. S&P/Case-Shiller HPI
9:45 a.m. Chicago PMI
10:00 a.m. Consumer confidence
10:00 a.m. Richmond Fed survey
3:00 p.m. San Francisco Fed President John Williams
6:40 p.m. St. Louis Fed President James Bullard
Monthly vehicle sales
Earnings: Best Buy, Mylan Labs, Broadcom, Shake Shack, Planet Fitness, Lowe's, Windstream, Luxottica
8:30 a.m. Personal income and spending
9:45 a.m. Manufacturing PMI
10:00 a.m. ISM manufacturing
10:00 a.m. Construction spending
1:00 p.m. Dallas Fed's Kaplan
2:00 p.m. Fed's Beige Book
6:00 p.m. Fed Gov. Lael Brainard
Earnings: Costco, A-B InBev, Ambev, Toronto-Dominion Bank, JD.com, Kroger, Burlington Stores, Autodesk, American Outdoor Brands, Wingstop, Barnes and Noble, Abercrombie and Fitch
8:30 a.m. Jobless claims
7:00 p.m. Cleveland Fed President Loretta Mester
Earnings: WPP Group
9:45 a.m. Services PMI
10:00 a.m. ISM nonmanufacturing
10:15 a.m. Chicago Fed President Charles Evans, Richmond Fed President Jeffrey Lacker
12:15 p.m. Fed Gov. Jerome Powell
1:00 p.m. Federal Reserve Vice Chairman Stanley Fischer at Monetary Policy Forum
1:00 p.m. Fed Chair Janet Yellen, Executives Club of Chicago on outlook, with Q&A