The Dow Jones Industrial Average returned to a record on Monday, joining other market gauges at all-time highs, as the stock market’s rally carried into a fifth week.
Oil producers, banks and other stocks that do well when the economy is strengthening again led the way. It’s a notable shift in leadership following months of struggles for what Wall Street calls “cyclical” stocks, which lagged due to worries about trade wars and the slowing global economy.
Behind the resurgence for cyclicals are rising hopes that the United States and China are making progress in negotiations on their trade dispute, or at least that they’re no longer making it worse. Reports last week also showed that the job market is continuing to grow, corporate profits aren’t doing as badly as Wall Street expected and interest rates will likely remain low for a while.
Even in manufacturing, which has been hit particularly hard by President Donald Trump’s trade war, investors saw some hopes that things may be hitting bottom soon.
The Dow climbed 114.75 points, or 0.4%, to 27,462.11 and surpassed its prior all-time high set in July.
The S&P 500 rose 11.36, or 0.4%, to 3,078.27, and the Nasdaq composite added 46.80, or 0.6%, to 8,433.20. Both the S&P 500 and Nasdaq also clinched records.
Rising optimism in the market was evident not only in U.S. stock indexes but also in higher yields for Treasurys. When investors feel less need for safety, the crowd thins to buy Treasury bonds. And when prices fall for Treasurys, their yields rise.
The yield on the 10-year Treasury climbed to 1.77% from 1.72% late Friday. Not only that, the gap between the yields of the 10-year and two-year Treasurys widened, which many on Wall Street see as a sign of increased confidence in the economy.
The two-year yield rose to 1.57% from 1.55%, and the gap between it and the 10-year yield is close to its largest since late July.
Financial stocks in the S&P 500 climbed 0.9%, aided by a 1.9% jump for Bank of America and a 1.8% gain for Citigroup.
Other cyclical sectors, such as energy and industrials, were also ahead of the pack.
Chevron jumped 4.6%, and Exxon Mobil added 3% as energy stocks overall climbed 3.1% after the price of oil rose.
A stronger global economy would mean more demand for energy, and benchmark U.S. crude rose 34 cents to $56.54 per barrel. Brent crude, the international standard, rose 44 cents to $62.13 a barrel.
Defensive stocks, meanwhile, lagged. Utilities fell 1.3% for the largest loss in the S&P 500, and real-estate stocks were down 1.1%.
Monday’s biggest loss in the S&P 500 came from Under Armour, which said it has been cooperating with federal regulators for two years on an investigation into its accounting practices. Its Class A shares plunged 18.9%.
In overseas stock markets, the French CAC 40 jumped 1.1%, and Germany’s DAX returned 1.4%. The FTSE 100 in London added 0.9%, South Korea’s Kospi rose 1.4% and the Hang Seng in Hong Kong climbed 1.6%.
Wholesale gasoline was unchanged at $1.66 per gallon. Heating oil climbed 1 cent to $1.94 per gallon. Natural gas rose 11 cents to $2.82 per 1,000 cubic feet.
Gold was unchanged $1,508.00 per ounce, silver rose 1 cent to $18.01 per ounce and copper rose 2 cents to $2.67 per pound.
The dollar rose to 108.64 Japanese yen from 108.26 yen on Friday. The euro strengthened to $1.1127 from $1.1163.