Stocks rose on Monday as the market's rally to record highs resumed amid increasing expectations that China and the U.S. will reach a so-called phase one trade deal.
The S&P 500 and Nasdaq Composite hit all-time closing highs as they rose 0.8% to 3,133.64 and 1.3% to 8,632.49, respectively. Both indexes also notched intraday records. The Dow Jones Industrial Average also had a record close, gaining 190.85 points, or 0.5% to 28,066.47.
President Donald Trump tweeted about the record, saying: "Enjoy!"
Tech was the best-performing sector in the S&P 500, rising 1.4%. Nvidia led the sector higher with a 4.9% gain. Intel's 2.1% advance led the Dow higher. The Nasdaq was lifted by a 1.8% rise in Apple shares while Amazon closed 1.6% higher.
Monday's gains come after the market's rally took a pause last week, with the S&P 500 snapping a six-week winning streak. The Dow fell for the first week in five while the Nasdaq ended a seven-week run.
Still, stocks have had a banner year. The S&P 500 is up 25% in 2019, and is headed for its biggest one-year gain since 2013. Historically, the S&P 500 has carried over its momentum into the following year when rallying at least 25% in year.
The Nasdaq, meanwhile, has rallied 30.1% year to date, on pace for its best yearly performance in six years. The Dow is up 20.3% year to date. That would be the 30-stock averages best annual gain since 2017.
"The market still expects a phase one deal that (most importantly) removes the threat of any further escalation in the trade war," said Tom Essaye, founder of The Sevens Report, in a note. "But unless there is a material positive surprise, phase one is not going to include material existing tariff reductions (there might be some, but likely not much), and as such it's unclear exactly how much it'll help global growth rebound."
China will raise penalties for violating intellectual property rights, according to the guidelines published by the Chinese government on Sunday. The guidelines added China will think about lowering punishment thresholds for IP theft. The Global Times, a state-run newspaper in China, also said both sides are getting "close" to reaching a deal.
Meanwhile, U.S. national security advisor Robert O'Brien said on Saturday that a phase one trade deal with China could happen before the end of the year. He also cautioned, however, that Trump would not ignore ongoing protests in Hong Kong.
Pro-democracy candidates in the embattled Asia city had a symbolic majority in district council elections over the weekend, after residents turned out to vote en masse following six months of anti-government protests. Hong Kong's Hang Seng index surged 1.5% to close at 26,993.04 after pro-democracy candidates surged to a landslide victory following a record voter turnout.
The U.S. and China have imposed tariffs on billions of dollars' worth of one another's goods since the start of 2018, battering financial markets and souring business and consumer sentiment.
But recent optimism around trade lifted equities to record highs. The Dow and S&P 500 are up 4.1% and 3.7%, respectively, over the past month. The Nasdaq Composite is up 4.7% over that time as well.
"I certainly struggle to put too much faith in the U.S.-China trade negotiators because they've led us on in what has amounted to an almost two-year circus," said Yousef Abbasi, director of U.S. institutional equities at INTL FCStone. "With that being said, the market still celebrates any potential progress."
Sentiment also got a lift on Monday after two big deals in Corporate America were confirmed.
Charles Schwab confirmed it will acquire rival TD Ameritrade for $26 billion in an all-stock deal. The deal, upon completion, will create a new company with more than $5 trillion in assets. TD Ameritrade shares rose 7.6% while Schwab's stock climbed 2.3%. CNBC first reported on the deal last week.
LVMH has reached a deal to buy jeweler Tiffany for $16.2 billion in cash, or $135 per share. The acquisition, which CNBC first reported on Sunday, is expected to close in the middle of 2020. Tiffany shares advanced 6.2%.
—CNBC's Sam Meredith contributed to this report.