Stocks posted a triple set of record highs, following on from the best monthly gain for the S&P 500 in nearly a year.
The Dow Jones Industrial Average finished up 94 points, 0.26% to 35,913, while the S&P 500 was rose 0.18%, and the Nasdaq advanced 0.63%.
"While we are seeing some shifts in where traders are eyeing opportunities, bullishness came back strong in October with 9 out of 11 sectors as net buys," said Chris Larkin, managing director of trading at E*Trade Financial. "The selling was primarily in traditionally defensive areas of the market—consumer staples and health care."
On the flip side, Larkin added with inflation perhaps stickier than anticipated and potentially higher rates on the horizon, traders rotated into real estate and ramped up buying in financials, often considered beneficiaries of higher rates.
"And with crude prices continuing to rise, traders went from net sellers to net buyers in October," he said. "Bottom line: while growth prospects may be dimming, traders continue to keep their finger on the pulse of what’s moving the market."
Fed officials will kick-off their two-day policy meeting Tuesday, with analysts looking for a formal start to the tapering process the following day with a slowing of the pace of monthly bond purchases that have been holding down market interest rates since the peak of the pandemic.
Wages surged, with third-quarter employment costs rising at the fastest pace in 39 years, according to the Labor Department's Employment Cost Index.
"Respectable arguments can still be made that the surge in inflation in both prices and wages will not persist indefinitely, but the danger is that the Fed could be pushed into taking action as insurance against these arguments being wrong," said Ian Shepherdson of Pantheon Macroeconomics.
Harley-Davidson (HOG) - Get Harley-Davidson, Inc. Report finished higher after the U.S. and the European Union reached an agreement on steel and aluminum imports that allowed for the cancellation of tariffs on the iconic motorcycle maker's products.
On Semiconductor Corp. (ON) - Get ON Semiconductor Corporation Report shares surged to a record high after the chipmaker and Apple (AAPL) - Get Apple Inc. Report supplier posted stronger-than-expected third-quarter earnings and forecast solid holiday-season revenues.
Roblox (RBLX) - Get Roblox Corp. Class A Report shares slipped after the online gaming "metaverse" platform restored services Sunday following a major outage that kept its games popular with kids offline for three straight days.