The Dow Jones Industrial Average closed just shy of 35,000 as investors grew more optimistic ahead of second-quarter earnings reporting season set to kick off this week.
The Dow rose 126.02 points, or 0.4% to 34,996.18, a new record close. The S&P 500 added 0.4% to 4,384.63, also a record close. The Nasdaq Composite traded up 0.2% to a new closing high of 14,733.24. The S&P 500's gain for the year so far now totals more than 16%.
Investors appeared cautiously optimistic ahead of the start of second-quarter earnings reports. JPMorgan Chase and Goldman Sachs will be among the first big companies to report Tuesday before the bell. Both stocks were higher on Monday and financials led among S&P 500 sectors,
"Most investors are expecting blockbuster earnings results and these will likely be peak earnings results," said Jack Ablin, chief investment officer at Cresset Wealth Advisors. "The most important element of these reports this week will be the outlook discussion from management and not necessarily the numbers of the last three months."
Second-quarter earnings are expected to surge more than 64% from levels depleted by the pandemic a year ago, according to estimates collected by FactSet. If companies deliver on those estimates, it will be the largest growth rate since the last quarter of 2009 as the market was coming out of the Great Financial Crisis.
Names linked to the economic comeback from the pandemic were slightly weaker with Carnival Corp. and United Airlines lower. Meanwhile, technology stocks showed pockets of strength with Tesla and Nvidia higher.
Shares of Walt Disney gained after "Black Widow" earned $80 million at the domestic box office from its debut, the most of any film released in the Covid era. The company also said it garnered an additional $60 million from the movie in Disney+ sales.
Earnings season will largely be the driver of the markets in coming weeks and early signs are looking good. So far, 66 S&P 500 companies issued positive earnings guidance into the second-quarter reports, the highest number of companies since FactSet began tracking the number. All 11 sectors of the market are set to post growth with energy, industrials, consumer discretionary, financials and materials seeing the biggest gains as the economy reopened.
"Continued earnings momentum should refuel investors' confidence in the recovery amid slowdown concerns and drive a rotation back into Value," Bank of America's Savita Subramanian said in a note Sunday.
Along with JPMorgan and Goldman Sachs, Pepsico will also report on Tuesday before the bell. Bank of America, Citigroup, Wells Fargo, Delta Air Lines and BlackRock report on Wednesday, and Morgan Stanley, Truist and UnitedHealth post results on Thursday.
Investors also anticipate important data to be released this week, including key readings on inflation on Tuesday and Wednesday, and June retail sales on Friday.
Federal Reserve chair Jerome Powell is set to testify before Congress on Wednesday and Thursday, and investors will be looking for any signals of fiscal policy updates.
"While earnings of course are going to be important, most of the earnings really don't come out until next week and the week after," Peter Boockvar, CNBC contributor and chief investment officer at Bleakley Advisory Group, said. "So while we'll focus on what the banks have to say...right now, it's all about CPI tomorrow, it's all about what Powell says and if he hints to the taper sooner rather than later."