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Stocks close higher for fourth straight session ahead of key inflation report, Dow rises 200 points

Pro Picks: Watch all of Monday's big stock calls on CNBC
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Pro Picks: Watch all of Monday's big stock calls on CNBC

Stocks rose on Monday as a weaker dollar and growing confidence that higher prices have peaked helped Wall Street's relief rally continue ahead of a key inflation report.

The Dow Jones Industrial Average gained 229.63 points, or 0.71%, to end at 32,381.34. The S&P 500 rose 1.06% and closed at 4,110.41. The Nasdaq Composite added 1.27%, wrapping the session at 12,266.41.

Energy was the top sector, but the rally was broad, with Bristol-Myers Squibb gaining 3.14% and tech stalwart Apple adding 3.85%.

The moves extended a rebound for U.S. stocks, as all three major averages snapped a three-week losing streak on Friday.

Stocks have been volatile ahead of the Sept. 20-21 meeting of the Federal Reserve, where the central bank is expected to deliver its third consecutive 0.75 percentage point rate hike in an effort to combat high inflation. Fed officials have reiterated in recent weeks they will keep hiking rates to fight inflation even if it hurts economic growth.

But some recent developments, including a weakening U.S. dollar and military success by Ukraine, appear to be boosting investor sentiment. Many traders are also optimistic about the August consumer price index report, which is scheduled for release on Tuesday morning.

"The combination of the somewhat surprising successes in Ukraine, and the possibility of a very favorable inflation headline that maybe even shows a decline for last month, may put us into a situation where we have a continued rally here," said Phillip Toews, CEO of Toews Asset Management. "And at that point the main threat in the short term and in the medium term will be whether earnings continue to deteriorate."

Lea la cobertura del mercado de hoy en español aquí.

S&P 500 and Nasdaq put together first 4-day advance in 2+ months

The S&P 500 rose Monday for a fourth day for the first time since July 7, while the Nasdaq Composite and Nasdaq-100 indexes did the same for the first time since July 8.

Animal spirits returned for the iShares Russell 1K Growth ETF (IWF), too — also higher for a 4th day for the first time July 8.

No surprise, the dollar index fell for a fourth straight day.

In commodities, silver was the standout, surging 5.82% to $19.86, the most since July 28 but the first 6-day rally since the day Russia invaded Ukraine (Feb. 24). Corn and soybean contracts both reached their highest since late June -- bad news for agricultural input costs and, indirectly, food inflation.

-- Scott Schnipper with Christopher Hayes and Gina Francolla

Inflation report expected to show prices easing, but not enough for the Fed

Inflation likely eased a bit in August as gasoline prices declined, but probably not enough to make a difference for Federal Reserve policymakers.

The consumer price index is due out Tuesday at 8:30 a.m. ET. It's expected to show that prices excluding food and fuel rose 0.3% from July and 6% from a year ago. Including those two sectors, so-called headline CPI is projected to decline 0.1% for the month but still be up 8% on an annual basis.

For headline CPI, it will be the second month in a row with little change, after July showed prices flat. But for core, it would be the second straight month of a 0.3% increase.

While both numbers point to slower gains in prices, Fed officials have said in recent days that one month's report won't sway them in their fight against inflation. The central bank is widely expected next week to approve its third consecutive 0.75 percentage point interest rate hike.

If the Fed follows through with the market's expectation, that will take the central bank's benchmark funds rate to a range of 3%-3.25%. That would be the highest level for the rate since early 2008.

—Jeff Cox

Stocks close higher, extend winning streak

Stocks finished up for their fourth straight session. The Nasdaq Composite rose nearly 1.3% to lead the way. The Dow underperformed but still rose more than 200 points.

— Jesse Pound

Bridgewater’s Greg Jensen sees stubbornly high inflation

Bridgewater co-CIO Greg Jensen said the belief that inflation is going to normalize to around 3% over time is too optimistic. The widely followed strategist believes that price pressures are going to stay "stubbornly higher than the market expects," he said at the annual SALT conference in New York. Persistent inflation, combined with slowing growth in the U.S., will continue to weigh on asset prices, Jensen said.

Asked about where to put money to work right now, Jensen said Latin America and commodity assets look relatively attractive.

— Yun Li

Alphabet and Microsoft aren't pulling their weight in lifting stocks higher, Strategas notes

Alphabet and Microsoft aren't doing their part to help the market much since the latest move higher began last week, the Strategas technical and macro research team led by Chris Verrone said in a note Monday.

"For as strong as some corners of the market were last week, we also wouldn't describe important weights like GOOGL or MSFT as exhibiting compelling leadership," they wrote. Both stocks have exhibited only weak rallies. In late Monday trading, while the S&P 500 was about 0.92% higher, Microsoft added 0.69% while Google-parent Alphabet fell 0.24%.

By contrast, financials and consumer discretionary stocks have improved lately, but aren't yet dominant, Strategas said. Although crude oil has been soft lately, "ConocoPhillips acts great," as does Albemarle and Ulta Beauty.

-- Scott Schnipper

Alphabet and Microsoft aren't pulling their weight in lifting stocks higher, Strategas notes

Alphabet and Microsoft aren't doing their part to help the market much since the latest move higher began last week, the Strategas technical and macro research team led by Chris Verrone said in a note Monday.

"For as strong as some corners of the market were last week, we also wouldn't describe important weights like GOOGL or MSFT as exhibiting compelling leadership," they wrote. Both stocks have exhibited only weak rallies. In late Monday trading, while the S&P 500 was about 0.92% higher, Microsoft added 0.69% while Google-parent Alphabet fell 0.24%.

By contrast, financials and consumer discretionary stocks have improved lately, but aren't yet dominant, Strategas said. Although crude oil has been soft lately, "ConocoPhillips acts great," as does Albemarle and Ulta Beauty.

-- Scott Schnipper

Yields are a reason to be skeptical of this rally, says Jef