U.S. stocks closed at a record high for a third consecutive trading session amid growing optimism over the budding economic recovery and progress on vaccines. Long-term Treasury yields edged lower.

The benchmark S&P 500 Index gained for a fifth straight trading session, led by the utilities and real estate sectors. The Dow Jones Industrial Average also closed at a record and finished up for a seventh session in a row. Apple Inc., Tesla Inc. and Facebook Inc. led the tech-heavy Nasdaq 100 higher. Crude oil pared a loss of more than 2 per cent.

“U.S. equities have become a buy high, sell higher asset class on the heels of economic reopening optimism, vaccination progress and additional government stimulus,” said Terry Sandven, chief equity strategist for U.S. Bank Wealth Management. “We’re maintaining our glass half full orientation for equities and that’s a function of favorable fundamental sentiment and technical trends.”

Yields on benchmark 10-year U.S. Treasury notes declined from the more than one-year high reached last week.

Brent crude dropped overnight, erasing a gain after a raft of economic data from China added to signs of recovery from the coronavirus pandemic. Concerns about tightening liquidity weighed on Chinese shares, with the CSI 300 Index closing down 2.2 per cent.

Investors remain preoccupied with rising long-term borrowing costs and their implications for reflation trades and the rotation in the stock market from growth to value shares.

In the U.S., investors are also considering the potential impact of higher taxes and how that could affect corporate profit growth. President Joe Biden is planning the first major federal tax hike since 1993 to help pay for a long-term economic program, according to people familiar with the matter. The White House is expected to propose a suite of tax increases, mostly mirroring Biden’s 2020 campaign proposals, according to four people familiar with the discussions.

”I think the market will wait a bit longer on the Biden tax story,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance. “People are going to want to know what is actually proposed, and more importantly, what is likely to make it through Congress.”

Elsewhere, Bitcoin pulled back after a weekend rally that sent prices above US$61,000 for the first time. The largest cryptocurrency was trading at about US$56,000 on Monday.

These are some key events this week:

Fed Chair Jerome Powell will likely reaffirm his no-tightening policy stance at the Fed policy meeting Wednesday.
Bank of England rate decision Thursday. BOE is expected to leave monetary policy unchanged.
Bank of Japan monetary policy decision and Governor Haruhiko Kuroda briefing Friday.

These are the main moves in markets:

Stocks

The S&P 500 Index increased 0.6 per cent to 3,968.77 as of 4:01 p.m. New York time, hitting the highest on record with its fifth consecutive advance.

The Dow Jones Industrial Average climbed 0.5 per cent to 32,952.28, reaching the highest on record with its seventh consecutive advance.

The Nasdaq Composite Index jumped 1 per cent to 13,459.71, the highest in two weeks.

The Stoxx Europe 600 Index was unchanged at 423.08.

The MSCI All-Country World Index advanced 0.4 per cent to 677.32, the highest in more than three weeks.

Currencies

The Bloomberg Dollar Spot Index gained 0.1 per cent to 1,139.79.

The euro dipped 0.2 per cent to US$1.1932.

The British pound decreased 0.2 per cent to US$1.3902.

The Japanese yen depreciated 0.1 per cent to 109.10 per dollar, the weakest in more than nine months.

Bonds

The yield on 10-year Treasuries declined two basis points to 1.60 per cent.

The yield on 30-year Treasuries decreased three basis points to 2.35 per cent.

Britain’s 10-year yield fell two basis points to 0.798 per cent.

Germany’s 10-year yield fell three basis points to -0.33 per cent, the lowest in almost two weeks on the largest fall in two weeks.

Commodities

West Texas Intermediate crude declined 0.2 per cent to US$65.45 a barrel.

Gold strengthened 0.3 per cent to US$1,731.74 an ounce, the highest in almost two weeks.

--With assistance from Kamaron Leach.