Shares of banks and other lenders and money managers rallied as investors bet the sector would benefit from anticipated second round of economic stimulus.
The Standard & Poor's 500 had one of its biggest gains so far in the month of September, following four straight weekly declines.
At the same time, the cost of insuring against declines in the S&P 500, as measured by the CBOE Volatility Index, also known as the VIX, rose.
"I guess 'vol' [is] to remain high until the elections," said Lorenzo Di Mattia, manager of hedge fund Sibilla Global Fund. The financial sector was one of the biggest gainers, reflecting, in part, a deal bonanza.
On Monday, there were substantial deals in both the oil and steelmaking businesses.
Meanwhile, U.S.-listed equity capital markets offerings already have eclipsed the amount raised in the previous peak of 2000, according to Dealogic, a surge in demand that's also resulted in higher fee percentages for investment bankers, as reported earlier.
Those estimates came ahead of another multibillion-dollar offering from data-mining firm Palantir Technologies, expected this week.
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