By Anna Hirtenstein and Alexander Osipovich
U.S. stocks climbed Monday as investors weighed the rise in coronavirus infections and the likelihood of future lockdowns against hopes for more stimulus from central banks.
The Dow Jones Industrial Average gained 580.25 points, or 2.3%, to close at 25595.80, its biggest one-day increase in more than three weeks. The rebound came after the blue-chip index lost 3.3% last week.
The S&P 500 climbed 44.19 points, or 1.5%, to 3053.24. The technology-heavy Nasdaq Composite rose 116.93 points, or 1.2%, to 9874.15.
Over the weekend, coronavirus cases world-wide passed 10 million, with more than 500,000 deaths. Authorities in Florida, Texas, California and Arizona, which have accounted for much of the recent rise in U.S. cases, have imposed new restrictions and retreated on reopening plans.
Still, stocks have been largely resilient in recent weeks. The Dow and S&P 500 are on track to end the month with gains of less than 1%. The Nasdaq is poised to close June with an increase of more than 4%, largely thanks to a surge in the shares of tech giants like Apple and Microsoft.
"The market is trading more on pure speculative optimism now than at any time in my career," said Philip Blancato, president of Ladenburg Thalmann Asset Management.
Expectations that the U.S. Federal Reserve will keep injecting liquidity into the market have helped fuel rebounds each time fallout from the coronavirus pandemic has sparked selloffs, Mr. Blancato added. "There's a safety net under the bond market and the equity market," he said.
A key measure of turbulence in U.S. stocks, the Cboe Volatility Index, slid Monday but remains higher than where it stood in early June, suggesting that investors continue to be jittery.
"There's still a high level of volatility, which shows that the degree of fear is still very elevated," said Sebastien Galy, a macro strategist at Nordea Asset Management. "I think we're in the last wave of this relief rally, caused by central banks doing their jobs and passing a lot of liquidity into the market."
Investors have been buying gold, a traditional haven in times of financial stress. Front-month gold futures in New York ticked up less than 0.1% on Monday to $1774.80, their highest settle since October 2012.
Large fund managers will face pressure to rebalance their portfolios as the end of both the month and the quarter approaches on Tuesday, according to Steen Jakobsen, chief investment officer and chief economist at Saxo Bank. Asset managers are likely to try to lock in the sharp gains posted in U.S. stock markets in April and May, he said.
Later in the week, investors will be watching the monthly U.S. jobs report, due Thursday, for further signs of how the economy is being affected by the pandemic.
All 11 of the S&P 500's sectors were positive Monday, led by industrials, which were up 3.2%.
Boeing jumped $24.48, or 14%, to $194.49, lifting the Dow and S&P 500, after U.S. air-safety regulators said they would begin key flight tests for the 737 Max. The tests are an important milestone for getting the plane back into use after two crashes forced the fleet to be grounded for more than a year.
Facebook shook off early losses and closed with a gain of $4.56, or 2.1%, to $220.64. More brands said over the weekend that they would stop advertising on the social-media platform, citing hate speech and divisive content.
Class A shares of Coty rallied 56 cents, or 13%, to $4.74 after the beauty company said it would buy a 20% stake in Kim Kardashian West's makeup brand. Coty's stock has lost more than half its value this year as the virus-fueled downturn has slowed sales.
Overseas, the pan-continental Stoxx Europe 600 gained 0.4%, while most major Asian equity benchmarks ended the day lower.
The British pound weakened 0.3% against the dollar as investors grew jittery about the Brexit talks that are set to resume this week. Failure by the U.K. to reach a meaningful trade deal with the European Union would jolt the country at the same time that its economy is being rocked by the pandemic.
In European stocks, London-listed shares of BP rose 3.4% after the oil major said it would sell its petrochemicals business for $5 billion to British chemicals company Ineos. The deal could help BP pare back its debt load.
In Asia, Hong Kong's Hang Seng Index fell 1%, while Japan's Nikkei 225 index declined 2.3%.
Rising infections in U.S. states served "as a wild card for markets, which needs to be monitored carefully," said Eli Lee, head of investment strategy at Bank of Singapore. "A persistent rise in infection cases would form a major impediment to easing of containment measures and the momentum of the economic recovery."
U.S. oil futures gained $1.21 a barrel, or 3.1%, to settle at $39.70.
The yield on the 10-year U.S. Treasury note settled at 0.636%, unchanged from Friday.
--Joanne Chiu contributed to this article.
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