Stocks gained on Monday, rising to fresh record levels after last week's volatility as investors looked ahead to a key event from the Federal Reserve later this week.

The S&P 500 advanced and reached a fresh all-time intraday high. The Nasdaq Composite outperformed, adding 1.6% to reach record intraday and closing highs. The positive sentiment extended into other risk assets, and oil prices also rebounded following recent declines. U.S. West Texas intermediate crude oil futures (CL=F) topped $64 a barrel, and Brent crude (BZ=F) jumped above $67 per barrel after suffering its longest losing streak since early 2018 as of last week.

"It's the return of risk appetite in the broader financial markets," Vandana Insights CEO Vandana Hari told Yahoo Finance of the rebound on Monday. "The real blow last week was signals the Fed might start tapering towards the end of this year, and I think that was a real double whammy for oil."

The Dow rose as shares of Boeing and Chevron (CVX) outperformed. Shares of Pfizer (PFE) jumped after the pharmaceutical company announced it will acquire the cancer drugmaker Trillium Therapeutics (TRIL) for $2.3 billion. Separately, the U.S. Food and Drug Administration fully approved Pfizer's top-selling COVID-19 vaccine following months of use under emergency authorization.

Stocks came under pressure late last week after the Federal Open Market Committee's July meeting minutes signaled that "most" Fed participants believed the economy will have recovered enough to warrant the start of asset-purchase tapering by the end of this year. The S&P 500 posted its first weekly decline in three weeks, albeit while closing out Friday's session to the upside. Central bank officials are set to hold their annual Jackson Hole Symposium this week starting on Thursday, which could serve as a forum for more remarks about the size and scope of the Fed's tapering plans.

A host of new earnings and economic data have also come in. On the whole, corporate profits have been exceptionally strong, with nearly 90% of S&P 500 companies having topped consensus earnings per share estimates, according to FactSet. That's come even as concerns over the spread of the Delta variant have resurged and issues around supply chain and materials and labor shortages have remained.

"I think we certainly are not going to get the kind of fiscal stimulus that we've had over the past year-and-a-half, nor the monetary stimulus. So I think overall, the market's handling all this remarkably well," Ed Yardeni, Yardeni Research president and chief investment officer, told Yahoo Finance. "The perception is that the Federal Reserve is now seriously moving in the direction of tapering because the economy is doing fine. But any way you slice it or dice it, it's going to be slower growth, slower earnings growth, slower economic growth, and that's probably keeping the bond yield down and giving some weakness to the oil patch."

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4:05 p.m. ET: Stocks end higher: Nasdaq gains 1.6% to jump to record closing level

Here were the main moves in markets as of 4:05 p.m. ET:

• S&P 500 (^GSPC): +37.86 (+0.85%) to 4,479.53

• Dow (^DJI): +215.63 (+0.61%) to 35,335.71

• Nasdaq (^IXIC): +227.99 (+1.55%) to 14,942.65

• Crude (CL=F): +$3.29 (+5.29%) to $65.43 a barrel

• Gold (GC=F): +$21.90 (+1.23%) to $1,805.90 per ounce

• 10-year Treasury (^TNX): -0.5 bps to yield 1.2550%

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1:20 p.m. ET: 'As long as the Fed's expanding its balance sheet, there's a tailwind behind the stock market': Gundlach

U.S. stocks have rallied to fresh all-time highs even against a backdrop of lingering risks around the coronavirus and slowdown in economic activity. According to "bond kind" Jeffrey Gundlach, the Fed's policies are still the predominant factor behind stocks' continued march higher, with the central bank's policies keeping bonds expensive relative to risk assets like equities.

"As overvalued as stocks are relative to historical measures like price-earnings ratio or Dr. Shiller's CAPE ratio or price-to-book ... they still are cheaper than bonds, Treasury bonds," Gundlach told Yahoo Finance Live on Monday. "And that's one of the things that's bolstering the U.S. stocks market, in addition to the stimulus in the economy."

"So simply, bonds are so overvalued versus the inflation rate and versus economic growth and other measures ... they all suggest on a fundamental basis, the 10-year Treasury should be at least 100 basis points if not up to 200 basis points higher than it is versus economic and inflation fundamentals," Gundlach said. "But it's not there because of the Fed's policy. As long as the stimulus goes on, the stock market can stay in very overvalued territory."

"If you compared the capitalization of the S&P 500 to the size of the Fed's balance sheet, it's almost a constant," he added. "And it's been that way with very little variation — it's almost like a law of physics, it feels like, of market physics anyway. As long as the Fed's expanding its balance sheet, there's a tailwind behind the stock market and so I think that's one of the reasons you're going to those new highs."

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10:23 a.m. ET: U.S. service-sector activity cooled to an 8-month low in August amid Delta variant: IHS Markit

Activity in both the U.S. services and manufacturing sectors decelerated in August as the rapid spread of the Delta variant dampened overall growth.

IHS Markit's flash August services business activity index fell to 55.2 from 59.9 in July. This was a steeper decrease than the dip to 59.2 expected, according to Bloomberg data, and brought the index down to the lowest level in eight months. Readings above the neutral level of 50.0 indicate expansion in a sector.

The manufacturing activity index also fell more than expected to 61.2 from 63.4 in July. This marked a four month low, and came in below the 62.0 economists were anticipating.

“The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth, especially for consumer-facing services, and further frustrated firms’ efforts to meet existing sales," Chris Williamson, chief business economist at IHS Markit, said in a press statement.

“Not only have supply chain delays hit a new survey record high, but the August survey saw increasing frustrations in relation to hiring," he added. "Jobs growth waned to the lowest since July of last year as companies either failed to find suitable staff or existing workers switched jobs."

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10:02 a.m. ET: Existing home sales unexpectedly rose in July, marking back-to-back monthly gain

Sales of previously owned homes gained 2.0% in July, according to the National Association of Realtors' monthly report, marking a second consecutive monthly gain. Consensus economists were looking for existing home sales to dip by 0.5% on the month, according to Bloomberg estimates.

In June, existing home sales had increased by 1.6%. July's advance brought existing home sales to a seasonally adjusted annual rate of 5.99 million, or the highest level since March.

Home prices continued to creep higher in July as tight inventories and elevated demand continued to weigh on affordability. The median existing-home price came in at $359,900 for a jump of 17.8% compared to the same month last year.

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9:31 a.m. ET: Stocks gain, recovering from last week's losses

Here's where markets were trading just after the opening bell Monday morning:

• S&P 500 (^GSPC): +19.22 (+0.43%) to 4,460.89

• Dow (^DJI): +172.05 (+0.49%) to 35,292.13

• Nasdaq (^IXIC): +65.23 (+0.44%) to 14,782.66

• Crude (CL=F): +$2.52 (+4.06%) to $64.66 a barrel

• Gold (GC=F): +$22.50 (+1.26%) to $1,806.50 per ounce

• 10-year Treasury (^TNX): -0.2 bps to yield 1.258%

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7:23 a.m. ET Monday: Stock futures point to a higher open:

Here's where markets were trading ahead of the opening bell:

• S&P 500 futures (ES=F): +14.5 points (+0.33%) at 4,451.50

• Dow futures (YM=F): +144.00 points (+0.41%) to 35,202.00

• Nasdaq futures (NQ=F): +43.75 points (+0.29%) to 15,130.50

• Crude (CL=F): +$1.75 (+2.82%) to $63.89 a barrel

• Gold (GC=F): +$8.80 (+0.49%) to $1,792.80 per ounce

• 10-year Treasury (^TNX): +1.2 bps to yield 1.272%

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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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