NEW YORK (Reuters) – U.S. stocks extended their recent climb on Monday, with the Dow reaching its longest daily winning streak in 13 months after the United States dropped plans to impose tariffs on Mexican goods and a couple of multibillion-dollar deals boosted the market.

Mexico on Friday agreed to step up efforts to stem the flow of Central American migrants after Washington threatened to impose a 5% import tariff on all Mexican goods starting on Monday.

Among major deals, United Technologies Corp agreed to combine its aerospace business with defence contractor Raytheon Co to create a new company worth about $121 billion.

Strategists said the Mexico trade news cheered investors, leaving the S&P 500 about 2% from its early May record high. But they noted indexes ended the session well off the day’s highs and feared investors may be trading more on hope than on reality.

“All it is, is a relief rally that we don’t have tariffs with Mexico,” said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

But the U.S.-China trade war is still brewing, and investors may have become too optimistic that the Federal Reserve will come to the rescue with an interest rate cut, he added.

“Heaven forbid the Fed sits on its hands next week and does nothing,” Nolte said.

Stocks have been rallying in part on optimism that the Fed would turn more accommodative to blunt the impact of escalating trade tensions.

“There is a risk that the market will be disappointed if the Fed does not signal some type of rate cut,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

The Dow Jones Industrial Average rose 78.74 points, or 0.3%, to 26,062.68, the S&P 500 gained 13.39 points, or 0.47%, to 2,886.73 and the Nasdaq Composite added 81.07 points, or 1.05%, to 7,823.17.

The Dow ended up for a sixth straight session, its longest winning streak since May 2018.

Shares of United Technologies, however, dropped 3.1% after President Donald Trump said he was a “little concerned” about the merger as it could reduce competition in the sector. Raytheon rose 0.7%.

Salesforce.com Inc said it would buy data firm Tableau Software for $15.3 billion. Salesforce.com shares fell 5.3%, while those of Tableau surged 33.7%.

U.S. automakers, which have long built vehicles in Mexico, traded higher, with General Motors Co gaining 1.5%. Corona beer maker Constellation Brands, which has significant Mexico exposure, rose 1.9%.

Advancing issues outnumbered declining ones on the NYSE by a 1.61-to-1 ratio; on Nasdaq, a 1.85-to-1 ratio favoured advancers.

The S&P 500 posted 63 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 96 new highs and 57 new lows.

Volume on U.S. exchanges was 6.45 billion shares, compared with the 6.99 billion average for the full session over the last 20 trading days.