Monday also marked the last trading day of April, which was the first positive month in three for the major indexes. The Dow and S&P 500 both rose nearly 0.3 percent in April, while the Nasdaq closed marginally higher.
Stocks opened higher on Monday, helped by a flurry of deal announcements and encouraging earnings reports.
Logistics company Prologis is acquiring DCT Industrial Trust for $8.4 billion in an all-stock deal. DCT Industrial's shares popped more than 11.5 percent. Marriott Vacations, the hotel chain's timeshare business, is also buying rival ILG for $4.7 billion.
Meanwhile, shares of Andeavor jumped 13 percent after Marathon Petroleum agreed to acquire it for $23 billion.
"This is really a byproduct of the same source of better sentiment, which is government backing off," said Maris Ogg, president at Tower Bridge Advisors.
In earnings news, Botox-maker Allergan posted a better-than-expected profit for the previous quarter. McDonald's earnings also beat the Street, sending the Dow component 5.8 percent higher.
"I'm encouraged by the reaction to McDonald's earnings," said Lindsey Bell, investment strategist at CFRA. She also said that several companies have seen their stocks initially rise and then fall after reporting better-than-expected earnings. "For the most part, it seems like investors are taking advantage of any pop in stocks to take profits," she said.
Bell added, however, this earnings season has been strong. Of the S&P 500 companies that have reported through Monday morning, 79.3 percent have reported stronger-than-forecast earnings, according to FactSet. More than 100 S&P 500 companies are scheduled to report earnings this week, including Apple and Mondelez International.
In economic news, the personal consumption expenditures (PCE) price index posted last month its biggest year-over-year gain since February 2017. The so-called core PCE — which strips out food and energy — jumped 1.9 percent through March. The core PCE is the Federal Reserve's preferred measure of inflation.
The U.S. 10-year Treasury yield briefly fell to its lowest since April 20, while the 2-year yield traded near 2.5 percent. The U.S. dollar index rose slightly.