Dow climbs 370 points to close at a record high amid optimism on the economic recovery

U.S. stocks climbed to record highs on Monday as a strong bounce in U.S. job growth and solid data in the services sector raised expectations for a swift economic recovery from the pandemic.

The Dow Jones Industrial Average rose 373.98 points to 33,527.19, a record closing high. The S&P 500 gained 1.4% to 4,077.91, also hitting a new record close. The tech-heavy Nasdaq Composite also climbed 1.7% to 13,705.59.

The Labor Department reported Friday that nonfarm payrolls increased by 916,000 in March, the highest since August 2020, while the unemployment rate fell to 6%. Economists surveyed by Dow Jones were expecting an increase of 675,000 and a jobless rate of 6%.

Meanwhile, a measure of U.S. services industry activity soared to a record high in March. The Institute for Supply Management's non-manufacturing activity index jumped to a reading of 63.7 last month, the highest level in the survey's history.

"A 'Capital V' recovery that is in the early innings," said Tony Dwyer, Canaccord Genuity's chief market strategist. "The only thing that could stand in the way would be another shutdown of the economy to contain new Covid-19 strains or a policy mistake by the Fed. Neither appear imminent."

Tesla shares popped more than 4% as the electric vehicle company reported production and delivery figures that broadly beat expectations.

GameStop shares cut their double-digit losses and closed down about 2% after the video game retailer said it may sell up to $1 billion worth of stock.

Classic reopening plays like airlines and cruise operators outperformed. Delta Airlines and United jumped more than 2% each, while Carnival and Norwegian Cruise Line gained 4.7% and 7.2%, respectively.

Bond yields, whose sudden advance spooked some investors in recent weeks, continued to ease. The 10-year Treasury yield fell slightly to 1.71% on Monday.

"We expect equities and other risk assets to be supported by the new nominal — a more muted response of government yields to stronger growth and higher inflation than in the past as central banks lean against any sharp yield rises," Wei Li, global chief investment strategist at BlackRock, said in a note.

The stock market is building on its recent strength after President Joe Biden introduced his multitrillion-dollar infrastructure proposal, which focuses on rebuilding roads, bridges and airports, expanding broadband access and boosting electric vehicle use and updating the country's electric grid. The plan will be funded partly by a hike in the corporate tax rate to 28%.

Treasury Secretary Janet Yellen on Monday pushed for a global minimum corporate tax in an effort to keep companies from relocating to find lower rates.

However, Biden's plan faces opposition among Republicans as the $2 trillion plan includes initiatives that they say extend beyond traditional infrastructure issues.

Republican Sen. Roy Blunt of Missouri on Sunday urged the Biden administration to pare back the package to roughly $615 billion and concentrate on physical infrastructure such as roads and airports.

Senate Minority Leader Mitch McConnell, R-Ky., said last week that Biden's plan would not receive Republican support and vowed to oppose the broader Democratic agenda.

On the pandemic front, the U.S. reported another daily record of new Covid vaccinations Saturday, pushing the weekly average of new shots per day above 3 million.