The news triggered a move into traditional safe-haven assets. The benchmark 10-year Treasury yield fell from around 1.85% earlier in the day to 1.8%. Gold futures erased earlier losses to settle 0.2% higher at $1,471.90 per ounce.

However, the major averages failed to post significant gains after CNBC's Eunice Yoon reported, citing a government source , that Chinese officials are pessimistic about the prospect of a U.S.-China trade deal. China is troubled by President Donald Trump saying recently the U.S. would not roll back tariffs as they thought both sides had agreed to do so in principle, Yoon reports.

The Dow Jones Industrial Average ended the day up just 31.33 points, or 0.1% at 28,036.22. The S&P 500 advanced 0.05% to 3,122.03 while the Nasdaq Composite closed 0.1% higher at 8,549.94. Disney was the best-performing Dow stock, rising 2%. Real estate and consumer staples both gained at least 0.6% to lead the S&P 500 higher.

US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He at the Diaoyutai State Guesthouse in Beijing on Feb. 15, 2019

That report came after Chinese state media said over the weekend China and the U.S. had "constructive" trade talks, noting U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin talked with Chinese Vice Premier Liu He about the core issues for a phase one trade agreement.

The so-called phase one deal was announced last month and is expected to be signed sometime this month. The optimism around that agreement, coupled with easier monetary policy from the Federal Reserve, helped spark the stock market's rally to record highs.

"The stock market has shown remarkable resiliency," Robert Pavlik, chief investment strategist at SlateStone Wealth, said in a note. "What is more remarkable is that the issues that the market has been dealing with since the start of the year haven't dissipated but have been grown or become more complicated."

Pavlik pointed out that the U.S.-China trade conflict, which began last year, remains an overhang for the market while corporate earnings have not improved and economic news has "weakened."

Over the past month, the Dow and S&P 500 are both up more than 4%. The Nasdaq, meanwhile, is up 5.8% in that time. The Dow also closed above 28,000 for the first time on Friday.

Ilya Feygin, senior strategist at WallachBeth Capital, noted stocks might be getting a boost thanks to investors' fear or missing out on the current rally.

"The market has been driven in recent weeks by people getting back their S&P 500 and Dow exposure," he said. "We saw about $9.5 billion in net inflows into U.S. equity ETFs, and we've had a lot of weeks like that lately. A lot of people were caught cautious and have been forced to put money to work at higher levels."

In corporate news, Coty shares gained more than 2% after the company announced it took a 51% stake in Kylie Cosmetics, Kylie Jenner's makeup company.