Wall Street's main indexes posted record closing highs for the second day in a row 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.

U.S. 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 one-month low.

During weekend TV appearances, U.S. 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.

5 OF THE MAGNIFICENT 7

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, Missouri.

Earnings from five of the heavyweight "Magnificent Seven" group — Microsoft, Apple, Alphabet, Amazon and Meta — later this week will test the endurance of the market's rally, 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.

According to preliminary data, the S&P 500 gained 82.92 points, or 1.23%, to end at 6,874.61 points, while the Nasdaq Composite gained 431.22 points, or 1.86%, to 23,636.09. The Dow Jones Industrial Average rose 333.87 points, or 0.71%, to 47,540.99.

Among the S&P 500's 11 major sectors, communication services , consumer discretionary and technology all rallied sharply. The laggards were materials and consumer staples.

The Philadelphia SE Semiconductor index hit a fresh record high. Qualcomm shares surged after it unveiled two AI chips for data centers, with commercial availability from next year. AI chip leader Nvidia also rose.

U.S.-listed shares of Chinese companies including Alibaba Group Holding, JD.com, PDD Holdings and Baidu also rallied on the day.

FED RATE CUT FULLY PRICED IN

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.

Keurig Dr Pepper climbed after lifting its annual sales forecast and raising about $7 billion to finance its purchase of Dutch coffee giant JDE Peet's. Lululemon shares rose after the company announced a partnership with the National Football League to launch an apparel collection.

Janus Henderson shares rallied 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.