Dow rips to a record high, now up nearly 18% on the year

The Dow Jones Industrial Average reached a milestone on Monday, joining the S&P 500 and Nasdaq Composite at record levels, as investor sentiment was lifted by strong earnings, a rebound in economic data and a potential U.S.-China trade deal.

The 30-stock measure rose 114.75 points, or 0.4%, to 27,462.11, its first all-time high since mid-July. Chevron led the way higher for the Dow, rising 4.6%. Trade bellwethers Boeing and Caterpillar also rose more than 1% each. 

Apple is by far the best-performing Dow stock since the index hit its previous record, rallying more than 25%. Intel, J.P. Morgan Chase and United Technologies are all up at least 10% in that time.  

Meanwhile, the S&P 500 climbed 0.4% to a fresh all-time high of 3,078.27. The Nasdaq advanced 0.6% to 8,433.20, also reaching record levels.

Monday's rise brought the Dow's year-to-date gain to nearly 18%. That would be the biggest one-year gain for the Dow since 2017, when it jumped 28.2%. The S&P 500 is up more than 22% for 2019 and is on pace for its biggest one-year gain since 2013, when it rallied nearly 30%. The Nasdaq is also up more than 27% this year. 

President Donald Trump touted the records, saying in a tweet: "Stock Market hits RECORD HIGH. Spend your money well!"

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"The market rally is now broadening out, meaning it's not just confined to tech and we'll likely go a little bit higher," said Peter Cardillo, chief market economist at Spartan Capital Securities. "It's based on a lot of enthusiasm that continues to build around trade."

U.S. Commerce Secretary Wilbur Ross said Sunday that American firms would be granted licenses to sell to Chinese telecom giant Huawei "very shortly." Ross' comments came after China said Friday it reached a consensus with the U.S. in principle following trade talks last week.

China and the U.S. have been engaged in a trade war for more than a year, but expectations for a deal being signed have increased recently. Last month, President Donald Trump said both sides had come to a "very substantial phase one" trade agreement that is expected to be signed later in November.

The move to record highs also follows the third rate cut by the Federal Reserve this year. The Fed also signaled it will not raise rates for the foreseeable future. However, the U.S. central bank also raised the bar for further rate cuts moving forward.

A strong U.S. jobs report out Friday also supported risk appetite for stocks. The U.S. economy added 128,000 jobs in October, the Labor Department said Friday.

"We stay constructive, looking for new highs before the next US recession strikes," Mislav Matejka, head of global and European equity strategy at J.P. Morgan, wrote in a note.

"Historically, recessions have tended to follow the trough in the unemployment rate by a year on average," Matejka wrote. "In other words, one needs to see the unemployment rate rising for a while to believe in a sustained slowdown."

Friday's jobs report also showed the U.S. labor force expanding my 325,000 last month. Meanwhile, those counted as being outside of the workforce dropped by 118,000 to 95.5 million.

"More people are being drawn back into the labor force. That, to me, is the key point," said Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management. "From a fundamental economic, business-cycle perspective, there is no reason to have a recession right now. Unless there is a policy mistake or miscalculation."

"I can recall very few times in my career where one economic report really changed the mood music so much on Wall Street as the jobs report did," he said.

Meanwhile, the corporate earnings season has largely been better than expected. Seventy-five percent of the S&P 500 companies that have reported have surpassed analyst expectations, FactSet data shows.

Under Armour posted Monday quarterly numbers that topped analyst expectations. However, the stock fell more than 18% after the company cut its 2019 revenue forecast, citing lower inventories and problems around its direct-to-consumer channels. Under Armour also disclosed a federal probe into its accounting practices. 

Uber Technologies and Shake Shack are among the companies set to report after the close Monday.

—CNBC's Silvia Amaro and Michael Bloom contributed to this report.