The Dow Jones Industrial Average rallied on Monday as gains in economically sensitive stocks offset losses from mega-cap tech stocks like Microsoft.

The 30-stock Dow advanced 300 points, or more than 1%. Boeing and Nike were among the best-performing stocks in the Dow, rising more than 4% each. Caterpillar, considered to be a bellwether for the global economy, climbed more than 4% as well.JPMorgan Chase also contributed to the Dow's gains, rising 1.2%.

Meanwhile, the S&P 500 climbed 0.2% as the energy and industrials sectors rose more than 2% each. Energy is the worst-performing sector in the S&P 500 for 2020, having lost more than 37% of its value. Industrials are down more than 5%.

"This actually suggests investors are turning more sanguine on the broader macro landscape, encouraged by the solid CQ2 earnings season and the bullish July economic data last week," said Adam Crisafulli of Vital Knowledge.

Monday's gain put the S&P 500 about 1.1% below its Feb. 19 record high.

However, the Nasdaq Composite struggled and dropped 0.4% as traders trimmed positions in Big Tech stocks. Facebook and Netflix shares slid at least 1.7% each along with Microsoft. Amazon dipped 0.8% and Alphabet fell 0.4%.

Monday's moves came after President Donald Trump signed several executive orders over the weekend aimed at extending coronavirus relief.

Those orders continue the distribution of expanded unemployment benefits, defer student loan payments through 2020and provide a payroll tax holiday. However, the unemployment benefit will be continued at a reduced rate of $400 per week. Originally, the benefit provided workers impacted by the pandemic with $600 per week.

"While this move by Trump may lead to legal challenges, politically it puts pressure on Congress to reach a deal," wrote Bill Stone,chief investment officer at Stone Investment Partners.

Trump's moves come after congressional leaders failed to make progress on a new coronavirus stimulus package last week. Several benefits from a package signed earlier in the year lapsed at the end of July, raising uncertainty about the U.S. economy moving forward.

Still, Trump's orders face a legal challenge as continuing the programs would require federal funding, which Congress controls.Democrats have insisted they will not support a bill that does not extend the $600 per week benefit.

On Monday, Treasury Secretary Steven Mnuchin told CNBC's "Squawk on the Street" he is open to more stimulus talks, noting: "We're prepared to put more money on the table."

"The fiscal cliff still represents downside risk for August," said Aneta Markowska, chief financial economist at Jefferies. Markowska added, however, any weakness from this will be "short-lived."

"By September, another round of fiscal support will create positive momentum. The reopening of schools, even if only in some states, will reinforce the positive momentum by (1) boosting back-to-school shopping and (2) allowing more parents to return to work in September," she said in a note to clients. "Bottom line, all the stars are lining up for another inflection point in activity and a second leg up in the reopening."

Wall Street was coming off a strong weekly performance. The Dow rose 3.8% last week for its biggest weekly gain since June. The S&P 500 climbed 2.5% along with the Nasdaq Composite. Last week's gains come during a historically tough time for the market as August kicks off the worst three-month stretch for the S&P 500.

CNBC's Yun Li and Michael Bloom contributed reporting.

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Dow rally gains steam, now up 300 points as Boeing and Nike lead - CNBC