The Dow Jones Industrial Average gained Monday as the index rebounded from a five-day losing streak.
The Dow rose 261.91 points, or 0.8%, to 34,869.63. The S&P 500 closed up 0.2% at 4,468.73. The two major indexes both finished the day positive for the first time in the past six sessions. The Nasdaq Composite dipped 0.1% to 15,105.58 for a fourth consecutive down day.
Covid cases reached a 7-day average through Friday of about 136,000, down from 157,000 average new cases at the end of August, according to the CDC. Pfizer's Covid vaccine could be authorized for children by the end of next month, sources familiar told Reuters.
"We retain a pro-risk allocation on strong global growth as the world continues to recover from the pandemic, accommodative policy, and continuing earnings surprises. Reopening of the global economy was delayed by the delta variant spread, but the delta wave is likely receding in the US and globally, and the pandemic recovery should restart," JPMorgan's Marko Kolanovic said in a note Monday.
But Monday's comeback was subdued. The S&P 500 trended lower for most of the trading session and didn't return to its intraday high, up 0.8% on the day, hit shortly after the open.
The Dow's rally also faded as the day went on; the index jumped more than 300 points earlier in the session and retreated to a 57.78-point gain at one point.
CNBC's Jim Cramer warned investors Monday morning that positive stock market openings could diminish during the trading day, especially during a historically tough month like September.
"I'm concerned that we have another positive opening and people come in and buy and then they get hurt. So I really caution people to come in," Cramer said on "Squawk Box."
Eight out of 11 S&P sectors were positive Monday, led by energy. APA Corp, Marathon Oil and Occidental Petroleum were the top three gainers on the S&P 500 with other energy stocks also lifting up the index.
Names linked to the reopening also gained. Delta Air Lines and Carnival Corp edged higher. Traditional cyclical plays GM and Citigroup rose.
Nike shares fell after BTIG downgraded the stock citing supply chain challenges caused by the pandemic. Production issues could significantly impact Nike's holiday sales, BTIG said.
"Supply bottlenecks, inventory shortages, higher commodity prices, and higher shipping rates have all contributed to higher input costs," noted Charlie Ripley, senior investment strategist for Allianz Investment Management.
Inflation fears have contributed to the market's recent losses. Data released Friday showed that producer prices rose 0.7% in August and 8.3% year over year, which was the biggest annual increase since records were first kept in November 2010.
"[Friday's] data on wholesale prices should be eye-opening for the Fed, as inflation pressures still don't appear to be easing and will likely continue to be felt by the consumer in the coming months," Ripley said.
The closely watched consumer price index will be released on Tuesday, at which point the Street will see how much of the heightened costs are being passed along to consumers. Economists surveyed by FactSet are expecting the reading to show that consumer prices jumped 5.3% on an annual pace in August. Retail sales data will be released later in the week.
Stocks have been under pressure since August's jobs report, released by the Labor Department on September 3, missed expectations. Worries are rippling through the market that the pandemic will continue to hamper economic growth while hot inflation will prompt the Federal Reserve to take action.
"The negative impact of the delta variant on the cyclical trade is clear," noted strategists at Jefferies. "It is increasingly evident that the impact of delta has delayed any Federal Reserve attempt at tapering, just as it has given fresh momentum to the Big Tech stocks with growth outperforming value so far this quarter."
The Fed will begin its two-day policy meeting on September 21, where investors will be looking for clues about the central bank's bond-buying program.
Despite last week's losses, the major averages are still relatively close to their record levels. The Dow, S&P 500 and Nasdaq Composite are all roughly 2% or less below their all-time highs.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign up to start a free trial today