A broad rally overnight has lifted the S&P 500 and Dow industrials to record highs, with a sharp rebound in crude prices boosting energy shares, while the Nasdaq turned positive for the year.
Cyclical sectors like technology, materials and energy posted the largest gains on the S&P, backed by the view that the US economy, despite a slow start to the year, is on solid footing.
Cyclicals are seen taking the lead in stocks for the rest of the year after utilities, telecoms and consumer staples led the way in the first half.
"We believe earnings in the US and GDP growth bottomed in the first quarter. If that is the case, stocks should continue on at least another 5-per cent gain from here this year," said Paul Zemsky, chief investment officer, Multi-Asset Strategies and Solutions at Voya Investment Management in New York.
Earnings of S&P 500 companies are estimated to have fallen five per cent in the second quarter, matching the drop in the first three months of the year, but a typical number of profit beats would leave the first quarter as the bottom of the earnings contraction.