The U.S. stock market scored a fresh record close on Monday, despite growing anxiety around the economic fallout should the Iran war drag into the summer.

The S&P 500 index SPX gained 0.2% to close above 7,400 for the first time in history. It has climbed nearly 17% from its low of the year set on March 30, a month into the conflict, according to Dow Jones Market Data. Like the S&P 500, the Nasdaq Composite Index COMP also scored a back-to-back record close Monday.

The rally in stocks comes despite global oil prices topping $104 a barrel on Monday, gaining almost 3%, after President Donald Trump rejected Iran's proposal to end the war, calling it "stupid," and saying the cease-fire deal was on "life support."

"For now, the party is still going," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management. Yet the party also feels like it started around 7 p.m., he said, and it's now getting closer to 10:30 p.m.

"People are still having a good time," Pavlik said Monday. But for anyone who got to the party early, "you start thinking about how long you are going to hang around," he said.

Stocks wobbled to start trade on Monday, but gained strength later in the day. That came as Wall Street's "fear gauge" also moved higher for a second session in a row.

The Cboe Volatility Index VIX, or "VIX," jumped 6.9% to 18.37 on Monday after gaining 0.6% on Friday, according to FactSet.

Sharp moves higher for the VIX can signal that investors expect turbulence in stocks over the next 30 days. Monday's move was the biggest for the VIX since Feb. 15, when it rose 11.5%, according to Dow Jones Market Data.

Looking back, there were 250 times since the 1990s that the S&P 500 closed at a record high on the same day the VIX rose, according to Dow Jones Market Data. That means it isn't terribly rare, but before Monday, it only had done so 34 times when the VIX moved up by at least 5%, according to the Dow Jones data.

After those episodes, the S&P 500 was lower by a median of -0.8% a month later, 1.6% higher after three months and up 3.2% six months later, according to Dow Jones Market Data.

A "one-day move like we had today in the VIX, on its own, does not necessarily mean anything in the context of the market making all-time-highs," said Jordan Rizzuto, chief investment officer of GammaRoad Capital Partners, an investment-research firm. "What could be more meaningful is a persistent rise in the VIX over an extended period of time, while the market is also making new highs."

Rizzuto also noted that the combination of a "persistent rise" in the VIX with stocks at all-time highs was an observable characteristic of the late-cycle rallies preceding the end of the dot-com bubble and the global financial crisis. But he isn't observing a persistent rise in implied volatility at this point.

Furthermore, the VIX moved steadily higher through the mid- to late-1990s, when stocks continued to touch all-time highs for several years, he said.

With Trump heading to China this week for meetings with President Xi Jinping, there's also been hope that Beijing may be able to help the U.S. and Iran end the conflict and reopen the Strait of Hormuz.

Oil and the U.S. Treasury market have been more cautious about the conflict, inflation and the potential for the Strait of Hormuz to stay closed for longer, while the stock market has been riding to new highs based on a narrow band of winning stocks.

The benchmark 10-year Treasury yield rose about 5 basis points to 4.41% on Monday, while the 30-year yield moved up to just under 5%.

"In a time like this, adding more bonds to protect your portfolio is the worst idea," said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers, who is based out of Paris.

Instead, his team has been adding more exposure to U.S. equities since mid-March after the Iran conflict began because of the economy's resilience, but also because the U.S. is the world's largest energy exporter and home to the major megacap technology companies fueling the artificial-intelligence race.

"We are not concerned about this concentration story," Chetouane told MarketWatch.