MPC Marathon Petroleum Corporation

By Riva Gold and Akane Otani 

U.S. stocks rose with commodity prices Monday, putting the S&P 500 and Nasdaq Composite on track for fresh closing records.

U.S. crude oil rose 3.4% to $47.93 a barrel after Iraq's oil minister said Sunday the country would offer new proposals at next week's meeting of the Organization of the Petroleum Exporting Countries, where officials are expected to discuss a supply cut.

Energy shares gained. Drilling contractor Transocean rose 4.3%, Chesapeake Energy gained 6.1% and Marathon Petroleum added 5.8%.

Metals prices also rose, buffeted by a retreat in the dollar. Gold was up 0.4% at $1,214 an ounce and copper extended a multiweek rally following Chinese President Xi Jinping's statement over the weekend that his government would support a Free Trade Area of the Asia Pacific. Many investors expect this to mean increased imports by China, the world's largest metal consumer.

On Monday, the Dow Jones Industrial Average rose 52 points, or 0.3%, to 18920, near its closing record of 18923.06. The S&P 500 rose 0.5% and was trading above its Aug. 15 record closing level of 2190.15. The Nasdaq Composite added 0.6%, passing its record close of 5339.52 reached on Sept. 22.

In government bond markets, the yield on the 10-year U.S. Treasury note fell to 2.321% from 2.337% on Friday. The 10-year note had posted its steepest two-week yield gain since 2001. Yields move inversely to prices.

"Our bond guys said the implementation of Trump's platform will result in stronger economic growth, stronger inflation, and the Fed will tighten rates," said Phil Orlando, chief equity market strategist at Federated Investors.

"When we saw that, we immediately increased our equity allocation and took it out of Treasurys," he said, favoring economically sensitive U.S. stocks such as financials and industrials instead.

Currency markets have tracked the bond market closely since the election, with the dollar mostly rising alongside a decline in the price of the 10-year Treasury note.

"It's all about yield," said Simon Derrick, chief currency strategist at BNY Mellon.

The WSJ Dollar Index, which measures the U.S. currency against 16 others, cooled on Monday from its longest winning streak since 2009. The index fell 0.4% and was on track for its first loss in 11 sessions.

Elsewhere, the Stoxx Europe 600 was up 0.3%, following gains in Asia.

Investors in Europe were also watching the weekend's political developments in France and Germany. Nicolas Sarkozy's campaign to reclaim the French presidency ended abruptly after a surge of support for his former prime minister, leaving François Fillon and Bordeaux Mayor Alain Juppé set to advance to a runoff next Sunday.

German Chancellor Angela Merkel also said Sunday she would run for a fourth term next year, ending months of speculation.

Local politics have started to take a toll, strategists said. With the euro, "for the first time in quite a while, people are focusing on something other than pure-yield," Mr. Derrick said, adding "there's been a realization that political uncertainty is perhaps greater."

Italian 10-year bond yields rose to as high as 2.111% from 2.017% on Friday, ahead of a coming referendum on constitutional reform. They later pulled back to 2.008%, according to Tradeweb.

Earlier, the Nikkei Stock Average added 0.8% to reach its highest close since January.

The Shanghai Composite also advanced 0.8% to its highest close since January, even as the Chinese yuan was fixed lower for a 12th straight session, hit by a recent appreciation of the dollar.

Write to Riva Gold at riva.gold@wsj.com and Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

November 21, 2016 11:37 ET (16:37 GMT)

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