Wall Street’s main indexes posted record closing highs for the second day in a row on Monday as investors were hopeful about the prospects for a U.S.-China trade deal and looked forward to a week packed with high-profile technology earnings and a widely expected U.S. interest rate cut.

President Donald Trump and his Chinese counterpart Xi Jinping are due to meet on Thursday to decide on a framework that could pause tougher U.S. tariffs and China’s rare-earth export curbs, easing market jitters around a trade war and sending Wall Street’s “fear gauge” VIX down to a roughly one‑month low.

During weekend TV appearances, Treasury Secretary Scott Bessent talked about agreements around China buying U.S. soybeans and its rare-earth exports after two days of trade talks in Malaysia.

Along with the upcoming meeting, Bessent’s comments boosted hopes for easing U.S.-China tensions, said Scott Wren, senior global market strategist at Wells Fargo Investment Institute in St. Louis.

Earnings from five of the “Magnificent Seven” megacap companies — Microsoft MSFT.O, Apple AAPL.O, Alphabet GOOGL.O, Amazon AMZN.O and Meta META.O — later this week will test the market rally’s endurance, which has largely depended on optimism around growth and capital expenditures related to artificial intelligence.

“With five of the Mag Seven reporting this week, what the market expects to hear is confirmation that all this AI CapEx is coming through, that the revenues and profits from AI are coming through,” said Wren.

The Dow Jones Industrial Average rose 337.47 points, or 0.71%, to 47,544.59. The S&P 500 advanced 83.47 points, or 1.23%, to 6,875.16 for its first close above the 6,800 level. The Nasdaq Composite gained 432.59 points, or 1.86%, at 23,637.46.

Among the S&P 500’s 11 major sectors, three rallied sharply. Communication services added 2.3% with Alphabet’s 3.6% rally leading the way.

Technology ended up 2% at a fresh record close, along with the Philadelphia Semiconductor index, which added 2.7%.

The biggest advance in tech came from Qualcomm, which surged 11% after it unveiled two AI chips for data centers, with commercial availability starting next year.

AI chip leader Nvidia also rose 2.8% and provided the S&P 500’s biggest boost.

Consumer discretionary finished up 1.5%, led by Tesla which rallied 4.3% on optimism around the U.S.-China talks.

But Christopher Brown, Synovus’ vice president of investments in private wealth management, said Tesla’s rally may be short-lived since the stock is still expensive “even with the best negotiated U.S.-China trade deal.”

The lagging sectors were consumer staples , off 0.27% and materials, which finished down 0.25%.

Shares of U.S.-listed rare earth miners slumped as the prospects for a U.S.-China agreement eased fears of supply disruptions that had boosted the sector this year. Shares of Critical Metals CRML.O ended down 13.7%, while NioCorp Developments NB.O dropped 11.5% and Ramaco Resources METC.O fell 2.6%.

U.S.-listed shares of Chinese companies including Alibaba Group Holding, JD.com, PDD Holdings rallied between 2.7% and 3% while Baidu climbed 4.8%.

Cooler inflation data last week all but sealed bets for a 25-basis-point rate cut by the Federal Reserve on Wednesday, and investors will closely monitor Chair Jerome Powell’s comments for clues on a December cut, as the U.S. government shutdown holds up key data releases.

Among individual stocks, Keurig Dr Pepper KDP.O climbed 7.6% after lifting its annual sales forecast and raising about $7 billion to finance its purchase of Dutch coffee giant JDE Peet’s. Lululemon LULU.O shares rose 1.8% after the sportswear maker announced a partnership with the National Football League.

Janus Henderson shares rallied 11.3% after it confirmed an acquisition proposal from Trian and General Catalyst.

U.S.-listed shares of Argentine companies jumped after President Javier Milei’s election victory. YPF gained 23.8% while Grupo Supervielle surged 48%, and Banco Macro rose 37.6%. Grupo Financiero Galicia rose 38.7% while Banco BBVA Argentina advanced around 40.8%.

Advancing issues outnumbered decliners by a 1.74-to-1 ratio on the NYSE, where there were 659 new highs and 69 new lows.

On the Nasdaq, 2,593 stocks rose and 2,145 fell as advancing issues outnumbered decliners by a 1.21-to-1 ratio. The S&P 500 posted 37 new 52-week highs and three new lows while the Nasdaq Composite recorded 132 new highs and 57 new lows.

On U.S. exchanges, 19.76 billion shares changed hands, compared with the 20.85 billion moving average for the last 20 sessions.

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