U.S. equities soared on Monday as investors cheered the results of the first round in the French presidential election.
"The market really seemed to like" the election outcome, said Randy Warren, chief investment officer at Warren Financial. "It really surprised me because the other candidate is Le Pen and she's the sleeper candidate."
The Dow Jones industrial average soared more than 200 points, with Goldman Sachs and JPMorgan Chase contributing the most gains.
The S&P 500 popped about 1 percent, with financials surging more than 2 percent to lead advancers. The SPDR S&P Bank ETF (KBE) and the Regional Banking ETF (KRE) both rose more than 2 percent.
The Nasdaq composite posted record highs on an intraday and closing basis, rising more than 1 percent.
Early results from the French election showed Emmanuel Macron and Marine Le Pen advancing to a presidential runoff. Far-right candidate Le Pen and centrist Macron were largely expected to pull ahead in the first round of the French contest. The two had led most of the polls leading up to the election.
Le Pen and Macron will face off again on May 7. Most polls show Macron easily beating Le Pen in the second round.
"While I don't believe the US stock market was worried whatsoever about the French election in terms of its pricing and recent action ... it's clear that we dodged a bullet with the high likelihood of a Macron Presidency," said Peter Boockvar, chief market analyst at The Lindsey Group, in a note.
European stock markets skyrocketed across the board, with the pan-European Stoxx 600 index popping about 2 percent. The French CAC 40 rose 4.14 percent and hit a nine-year high.
The euro also rose sharply against most major currencies. The common currency briefly broke above $1.09 against the U.S. dollar and last traded around 1.3 percent higher at $1.087.
Macron "is the prohibitive favorite to win the presidency in two weeks thereby leaving far too little time for his challenger to make up any significant ground," said Jeremy Klein, chief market strategist at FBN Securities. "Although the outcome hardly qualifies as a surprise, investors breathed a huge sigh of relief."
U.S. stock futures rose more than 1 percent in the premarket.
"We've certainly seen the French election give risk assets a boost," said Chris Gaffney, president of EverBank World Markets. "But now you're seeing the narrative shift almost immediately to the possibility of a government shutdown."
That said, investors are also staring down the barrel of a potential government shutdown. Government funding will end Friday unless Congress can agree on at least a temporary funding resolution.
The last time the government shut down was Oct. 1 through 16, 2013. During that time, the S&P 500 rose about 1.6 percent, but not without some volatility. The index moved more than 1 percent three times in that time period.
"There's a lot of anxiety over a government shutdown. One would hope we learned from the last time we went through this," said Bruce McCain, chief investment strategist at Key Private Bank.
The possibility of a shutdown comes as President Donald Trump is about to conclude his first 100 days in office. On Monday, Dow Jones reported that Trump ordered aides to put together a tax plan to cut the corporate tax rate to 15 percent.
Expectations of tax reform have been one of the pillars of the stock market's postelection.
Wall Street also braced itself for a busy week of earnings. About 200 S&P components are set to report this week, including Google-parent Alphabet, Microsoft and 3M.
Of the 95 S&P 500 companies that have reported as of Monday morning, 77 percent exceeded earnings expectations, according to data from The Earnings Scout.
The Dow Jones industrial average rose 216.13 points, or 1.05 percent, to close at 20,763.89, with JPMorgan Chase outperforming and Nike the top decliners.
The gained 25.46 points, or 1.08 percent, to end at 2,374.15, with financials leading nine sectors higher and real estate and telecommunications lagging.
The Nasdaq advanced 73.30 points, or 1.24 percent, to close at 5,983.82.
About three stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 907.07 million and a composite volume of 3.647 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 10.9, down 25.6 percent.
On tap this week:
Earnings: Alcoa, Newmont Mining, Kimberly-Clark, Illiinois Tool Works, Hasbro, Halliburton, Whirlpool, Express Scripts, Ameriprise, Range Resources, Canadian National Railway, J&J Snack Foods, Owens-Illinois, Crane
Earnings: Caterpillar, 3M, Coca-Cola, McDonald's, Dupont, Eli Lilly, Novartis, AutoNation, Baker Hughes, SAP, Biogen, AT&T, Lockheed Martin, PulteGroup, Freeport-McMoran, JetBlue, AK Steel, Polaris, Paccar, Valero Energy, Xerox, TransUnion, Arconic, Capital One, Chipotle Mexican Grill, Discover Financial, U.S. Steel, Juniper Networks, Stryker, Panera Bread, United Health Services, Valvoline
9:00 a.m. S&P Case-Shiller home prices
9:00 a.m. FHFA home prices
10:00 a.m. New home sales
10:00 a.m. Consumer confidence
Earnings: Boeing, Daimler, Fiat Chrysler, Pepsico, United Technologies, GlaxoSmithKline, Anthem, Alaska Air, Northrop Grumman, General Dynamics, Dr. Pepper Snapple, Hershey, Norfolk Southern, State Street, Credit Suisse, Hess, Seagate Technology, Twitter, Nasdaq, Amgen, Paypal, F5Networks, Tractor Supply, Buffalo Wild Wings, Boston Beer, SixFlags, CR Bard, Whiting Petroleum, Suncor
Earnings: Alphabet, Microsoft, Intel, Amazon.com, Raytheon, Baidu, Starbucks, Expedia, Comcast, Bristol-Myers Squibb, Flex, GoPro, Western Digital, Vertex , Sirius XM Radio, Under Armour, American Airlines, Southwest Air, MGM Growth, Generac, Domino's Pizza, CME Group, KKR, Johnson Controls, Union Pacific, UPS, Total, Celgene, Deutsche Bank, Alexion Pharma, Nintendo, AbbVie, Bayer, Air Products
7:45 a.m. ECB rate decision
8:30 a.m. ECB President Mario Draghi press briefing
8:30 a.m. Jobless claims
8:30 a.m. Durable goods
8:30 a.m. Advance econ indicators
10:00 a.m. Pending home sales
10:00 a.m. Housing vacancies
Earnings: Exxon Mobil, Chevron, Colgate-Palmolive, Honda Motor, Barclays, UBS, Sony, Synchrony Financial, Spirit Airlines, Autoliv, Sanofi, Spirit Airlines, Goodyear Tire, Calpine, Cabot Oil and Gas, Phillips 66, Weyerhaeuser
8:30 a.m. Q1 adv Real GDP
9:45 a.m. Chicago PMI
10:00 a.m. Consumer sentiment
2:30 p.m. Philadelphia Fed President Patrick Harker
Watch: Rally will be earnings based