The Dow Jones Industrial Average rose 146.43 points, or 0.38 percent, to 38,386.09. The S&P 500 added 16.21 points, or 0.32 percent, to 5,116.17. The Nasdaq Composite Index increased by 55.18 points, or 0.35 percent, to 15,983.08.
Nine of the 11 primary S&P 500 sectors ended in green, with consumer discretionary and utilities leading the gainers by going up 2.03 percent and 1.39 percent, respectively. Meanwhile, communication services and financials led the laggards by dropping 2.06 percent and 0.19 percent, respectively.
The U.S. Treasury Department announced on Monday that it anticipates borrowing 243 billion dollars in the second quarter, marking a 41 billion dollars increase from previous estimates. The revised forecast includes an end-of-quarter cash balance target of 750 billion dollars. Looking forward to the third quarter, the Treasury anticipates borrowing of 847 billion dollars in net marketable debt, with a targeted cash balance of 850 billion dollars.
The yield on the 10-year Treasury note was down 5 basis points on Monday to 4.616 percent, as of 4 p.m. EDT.
Looking forward, the Federal Reserve's policy announcement on Wednesday could indicate whether investors' expectations of imminent interest-rate cuts are justified. While the central bank is widely anticipated to keep the borrowing cost unchanged, investors will still closely monitor the post announcement press conference with Fed Chair Jerome Powell.
Macquarie's North America economic team has revised its outlook, now projecting zero rate cuts by the Fed this year due to upside risks for inflation.
Macquarie Head of North America Economics David Doyle noted that while core inflation was initially expected to reach the 2 percent to 2.5 percent range by mid-2024, this timeline has shifted, and achieving this range may be delayed until 2025.
As a result, the team no longer anticipates a 25-basis-point cut in December and believes the first reduction in Fed rates will occur only when the 2 percent inflation target becomes more imminent. "We continue to see risks to this as skewed in a hawkish direction with it becoming increasingly possible that the next policy change is a hike rather than a cut," Doyle said.
On the corporate front, Tesla's stock continued to recover after clearing a key hurdle for full self-driving technology in China. Meanwhile, earnings season will accelerate on Tuesday with anticipated results from Amazon, McDonald's, and Coca-Cola.
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