Global stocks climbed after President Donald Trump suspended plans for tariffs on Mexico. Sovereign bonds fell, along with gold and the yen, as demand for havens ebbed.
The S&P 500 index rose for a fifth straight session, led by chipmakers, retailers and auto companies, though ended off its highs of the day.
Emerging-market shares jumped the most since January as Mexico's peso posted its best day in almost a year after the accord with the U.S. late Friday.
The dollar edged higher while the onshore yuan fell to its weakest level since November after China's central bank hinted it could fall further.
The benchmark U.S. gauge reached the highest in a month, recovering from a painful rout in May, as large takeover deals Monday provided additional support. But the giddiness was tempered as investors looked toward the next developments in the U.S.-China trade showdown.
Treasury Secretary Steven Mnuchin has said the "main progress" on trade may occur when presidents Trump and Xi Jinping meet at the G-20 summit later this month, while finance chiefs over the weekend warned about escalating risks from geopolitical tensions.
"The fact that the president removed the tariffs that were going to take effect shortly is a positive for the markets," said Michael Sheldon, the chief investment officer at RDM Financial Group at HighTower. "The big question remains the trade talks with China that are overhanging the economy and the markets."
Here are some key events coming up:
- ECB President Mario Draghi speaks at a conference in Frankfurt on Wednesday.
- A key measure of U.S. inflation, the consumer price index, is also due Wednesday.
- The race to succeed Theresa May heats up with the first Conservative Party leadership ballot Thursday.
- Euro-area finance ministers meet in Luxembourg Thursday. On the agenda -- financial penalties for Italy about its debt load, and the euro-area budget.
- China and the U.S. release industrial production, retail sales data Friday.
And these are the main moves in markets:
- The S&P 500 index added 0.5% at the close of trading in New York.
- The Stoxx Europe 600 rose 0.2%.
- The U.K.'s FTSE 100 index climbed 0.6%, reaching the highest in five weeks.
- The MSCI Emerging Market index surged 1.5%, the most since January.
- The Bloomberg Dollar Spot index rose less than 0.1%.
- The Japanese yen sank 0.2% to 108.43 per dollar.
- The onshore yuan declined 0.3% to 6.9311 per dollar.
- The euro declined 0.1% to $1.1319.
- The British pound sank 0.3% to $1.2694.
- Mexico's peso surged 2.2% to 19.1989 per dollar.
- The yield on two-year Treasuries increased five basis points to 1.9%.
- The yield on 10-year Treasuries rose six basis points to 2.14%.
- Germany's 10-year yield climbed four basis points to -0.22%, the first increase in a week.
- West Texas Intermediate crude fell 1.3%, to $53.31 a barrel.
- Gold sank 0.9%, to $1,328.46 an ounce, on the biggest tumble in two months.
Cormac Mullen and Todd White of Bloomberg News contributed to this report.