Stocks rose in choppy trading on Monday as investors pored through the latest U.S.-China trade developments and equities added to a massive rally in the prior trading session.
The Dow Jones Industrial Average climbed 98.18 points to 23,531.35 after briefly falling 131.57 points. At is high of the day, the 30-stock Dow rose 254.58 points. The gained 0.7 percent to close at 2,549.69, led by a 2.36 percent gain in the consumer discretionary sector. The Nasdaq Composite advanced 1.26 percent to 6,823.47, posting its seventh positive session in eight, as Amazon shares rose more than 3 percent.
The S&P 500 energy sector was also among the best performers on Monday. The sector jumped 1.3 percent as Cabot Oil and Hess both rose more than 4 percent. Energy stocks got a boost from a 1.2 percent surge in U.S. oil prices.
On Friday, the major indexes all surged more than 3 percent after Federal Reserve Chair Jerome Powell said the central bank would be "flexible" in its approach to monetary policy. Stronger-than-expected employment data also contributed to Friday's sharp gains.
"The January effect will likely continue, but the market will be erratic as the trade talks continue," said Peter Cardillo, chief market economist at Spartan Capital Securities. "The real key is trade. Any sign that trade talks are going well could send the market to the upside."
According to Reuters, the Chinese foreign ministry said Monday that China and the U.S. have expressed an eagerness to work together. The ministry also added China stands ready to resolve trade disputes with the U.S. on an equal footing.
President Donald Trump said Sunday that weakness in the Chinese economy gave Beijing an extra incentive to work toward a resolution to the global trade war. "I think China wants to get it resolved. Their economy's not doing well," Trump told reporters at the White House.
The U.S. and China slapped a series of punitive tariffs on each other's goods last year, sparking concerns over a global economic slowdown. The U.S. has already put tariffs on $250 billion in Chinese goods — and has threatened duties on double that value of products. Beijing has responded with tariffs on $110 billion in U.S. goods, specifically targeting politically important industries such as agriculture.
U.S. stocks have been volatile recently as investors grapple with the trade talks, an ongoing government shutdown in Washington and fears that the economy may be slowing down.
"It would be premature … to consider that the volatility in the stock market will disappear and that a sustained new uptrend has begun," Bruce Bittles, chief investment strategist at Baird, said in a note.
"Fourth-quarter earnings reports will soon be forthcoming accompanied by important guidance figures for 2019," Bittles said. "Additionally, uncertainty lingers over trade talks with China as does the impact of the slowdown in global growth on the domestic economy."
Amazon shares rose after Pivotal Research Group initiated the company with a buy rating. The research firm said Amazon's opportunities this year are "mostly unconstrained," adding the stock could surge 20 percent.
— CNBC's Sam Meredith and Eustance Huang contributed to this report.