The Dow is up 100 factors to begin the week because the market’s restoration rally continues to the upside

Stocks rose on Monday as a weaker dollar and growing confidence that inflation has peaked helped Wall Street’s recovery rally continue.

The Dow Jones Industrial Average rose 277 points, or 0.9%. The S&P 500 rose 1.1% and the Nasdaq Composite gained 1.2%.

The moves build on a rebound in US stocks as all three major moving averages suffered a three-week losing streak on Friday. The Dow is up 2.6% last week while the S&P 500 is up 3.7%. The Nasdaq Composite gained 4.1%.

Stocks were volatile ahead of the Sept. 20-21 Federal Reserve meeting, when the central bank is expected to make its third straight 0.75 percentage point hike in interest rates to combat high inflation.

Investors on Wall Street have been looking for signs that future rate hikes may be smaller as inflation cools, but Fed Chair Jerome Powell reiterated last week that he is “strongly committed” to bringing inflation down.

The European Central Bank announced its own big rate hike last week, which has helped cool the US dollar’s recent rise.

“We see the relief in stock prices and the recent broad dollar correction continue into the week as markets eye the near-term peak of the central bank’s dovish stance and positioning is relatively dovish,” said Citi strategist Ebrahim Rahbari in a note to customers.

This week, investors eye the August CPI report, which is due out on Tuesday. The report is one of the last inflation data the Fed will see ahead of its September meeting. Retail sales and industrial production reports will be released on Thursday.

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