REUTERS: Wall Street surged on Monday, fueled by expectations of a coronavirus relief package and by a rally in Amazon, Apple and other technology stocks ahead quarterly earnings season.
Apple Inc jumped nearly 7per cent ahead of an event on Tuesday, when it is expected to unveil its newest iPhones.
Amazon rallied over 6per cent ahead of its annual Prime Day shopping event on Oct. 13 and 14. Microsoft climbed 3.5per cent, helping lift the S&P 500 information technology index by 3.3per cent.
The S&P 500 was about 1per cent below its record closing high from Sept. 2, nearly recovering from most of a 9per cent pullback last month.
Optimistic sentiment dominated after the Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill as negotiations on a broader package ran into resistance.
"It looks like the administration wants a deal done before the election," said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. "Now it's up to the Republican Senate to figure out how big the number is going to be."
Many investors view Democratic candidate Joe Biden as more likely to raise taxes, and for months have seen a second term for Trump, who favors deregulation, as better for the overall stock market.
However, with growing expectations of a Democratic win in next month's presidential election, investors are increasingly pointing to potential benefits of a Biden presidency, such as greater infrastructure spending and less global trade uncertainty.
Betting odds aggregated by RealClearPolitics suggest bettors see a 67per cent chance Biden will win and a 33per cent chance for Trump, the greatest gap so far between the two candidates.
With the Oct. 15 presidential debate officially canceled, Trump plans to travel to key battleground states this week as his doctor declared he was no longer a transmission risk for the novel coronavirus.
Results from big U.S. banks will be in focus this week, with JPMorgan & Co and Citigroup set to report on Tuesday. The S&P 500 banks index gained 0.9per cent.
Overall, analysts expect third-quarter earnings for S&P 500 companies to fall 20.7per cent from a year earlier, smaller than a 30.6per cent slump in the second quarter.
The Dow Jones Industrial Average was up 1.13per cent at 28,910.08 points, while the S&P 500 gained 2.01per cent to 3,546.95.
The Nasdaq Composite added 3.16per cent at 11,945.77.
The S&P 500 energy index fell 0.4per cent as oil prices dropped on easing supply worries.
Twitter Inc jumped 5.7per cent after Deutsche Bank upgraded the social media company's shares to "buy" on expectations of continued growth in 2021.
Advancing issues outnumbered declining ones on the NYSE by a 1.48-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favored advancers.
The S&P 500 posted 70 new 52-week highs and no new lows; the Nasdaq Composite recorded 158 new highs and 11 new lows.
(Additional reporting by Medha Singh and Shivani Kumaresan in Bengaluru; Editing by Marguerita Choy)