Stocks finished sharply higher Monday as investors remained hopeful of further fiscal stimulus and prepared for quarterly earnings reports from the biggest banks in the U.S.
Technology shares such as Apple (AAPL) - Get Apple Inc. (AAPL) Report, which rose ahead of its expected iPhone 12 unveiling Tuesday, and Amazon.com (AMZN) - Get Amazon.com, Inc. Report, which gained ahead of the start of its Prime Day event, were the standouts.
The Dow Jones Industrial Average finished up 250 points, or 0.88%, to 28,837, the S&P 500 was up 1.64% and the Nasdaq jumped 2.56%.
Stocks closed higher Friday and the S&P 500 had its best week in three months after the White House raised its coronavirus aid proposal to $1.8 trillion from $1.6 trillion. The offer, however, still remains below the latest proposal of $2.2 trillion from Speaker Nancy Pelosi and House Democrats.
Pelosi rejected the latest Trump proposal as “one step forward, two steps back,” but said she was still hopeful progress toward a relief package can be made.
"I remain hopeful that (Friday's) developments will move us closer to an agreement on a relief package that addresses the health and economic crisis facing America’s families,” Pelosi said in a Saturday letter to colleagues.
It's expected that the House speaker and Treasury Secretary Steven Mnuchin will hold more aid talks this week.
Stimulus negotiations aside, the market's immediate concern will be third-quarter earnings season, which kicks off Tuesday with reports from JPMorgan Chase (JPM) - Get JPMorgan Chase & Co. (JPM) Report, Citigroup (C) - Get Citigroup Inc. Report and Johnson & Johnson (JNJ) - Get Johnson & Johnson (JNJ) Report.
About 31 companies will report this week in an earnings season that is expected to show collective S&P 500 profits falling 21% from last year to a share-weighted total of $273.1 billion.
"The stimulus stalemate still looms large, though it failed to derail the market last week," said Chris Larkin, managing director of trading and investment product at E-Trade.
"And with high expectations for big bank earnings kicking off the season, we could get a clearer picture into just how far we’ve come in terms of economic recovery.
"Any forward guidance is key as we close in on the end of this historic year - though we pretty much know anything can turn on a dime with movement on the vaccine front, or a rise in cases.
"Although we’re in a much better place when it comes to managing the virus this time around, which means the effects of a second wave could be much more minimal."