Wall Street rises ahead of year’s last rate hike by the Fed

Stocks closed higher Monday as Wall Street kicked off a busy week when central banks are likely to unload the year’s final barrage of interestrate hikes meant to drive down the world’s painfully high inflation.

More than 90% of stocks in the benchmark S&P 500 index closing higher.

The market rally came ahead of a key inflation report on Tuesday and a meeting of policymakers at the Federal Reserve. Investors expect the Fed to announce Wednesday its last rate hike of the year following a blitzkrieg that began in March.

“Tomorrow, the inflation data is pretty important because we’ve been getting some decent reads,” said Tom Martin, senior portfolio manager at Globalt Investments. “Not to say that inflation has been coming down by leaps and bounds, but sort of at the margin it looks as though prices are getting a little bit weaker.”

The main reasons for Wall Street’s struggles much of this year have been high inflation and the higher interest rates engineered to combat it.

Higher rates slow the economy by design and risk causing a recession if they go too high, all while dragging down prices of investments. One upside for investors is that the Fed has hinted it will dial down the size of its rate hikes, leading to expectations for a more modest increase of 0.50 percentage points.

The S&P 500 rose 56.18 points (1.4%) to 3,990.56. The Dow Jones Industrial Average gained 528.58 (1.6%) to 34,005.04. The Nasdaq jumped 139.12 (1.3%) to 11,143.74. The Russell 2000 picked up 21.95 (1.2%) to 1,818.61.