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The Dow Jones Industrial Average rose 22.92 points to 26,112.53 while the S&P 500 closed 0.1% higher at 2,889.67. The Nasdaq Compositeoutperformed, rising 0.6% to 7,845.02 as tech shares gained.
Facebook and Netflix climbed 4.2% and 3.2%, respectively, while Amazon advanced 0.9%. Alphabet climbed 0.7% while Apple advanced 0.6%.
The Fed is scheduled to start a two-day monetary policy meeting on Tuesday. Expectations for any policy changes are low, but investors will look for clues about potential rate cuts in July and later in 2019.
“This week is all about the Fed,” said Michael Reynolds, investment strategy officer at Glenmede. Before these types of meetings, “where we’re going to get information like the dot plot and a revised statement that could be very consequential, the market tends to be in a holding pattern until we get that data. That’s what we’re expecting this week.”
“The market is going to be looking for evidence that the Fed will open the door to possibly cut rates within the next three months.”
Investors are betting on the Fed cutting rates in July and September as well as December, according to the CME Group’s FedWatch tool. The market has been clamoring for lower rates amid indications of potentially slower economic growth. In theory, lower rates would boost economic growth.
The Fed will make its monetary-policy announcement on Wednesday. Fed Chair Jerome Powell is scheduled to hold a news conference after the announcement.
“Changes in the post-meeting statement and the updated dots will point in the direction of a cut at the next FOMC conclave at the end of July,” said Doug Peta, chief U.S. investment strategist at BCA Research, in a note. “Against a backdrop of uninspiring global growth, taking out some monetary policy insurance to protect against increasing trade frictions may well be a prudent course of action, especially in a low-inflation environment.”
Worries over the economy have increased recently after jobs growth and manufacturing activity slowed last month. The U.S. economy is expected to grow by 2.1% in the second quarter, according to the Atlanta Federal Reserve’s GDPNow tracking tool.
Lingering trade tensions are also dampening the economic outlook on Wall Street. China and the U.S. have yet to strike a trade deal. Earlier this year, the two sides were expected to reach an agreement that would eliminate tariffs on Chinese and U.S. goods.
Commerce Secretary Wilbur Ross also said Monday that President Donald Trump is “perfectly happy ” to slap further tariffs on Chinese imports if the two countries cannot reach a deal.
Equities posted slight gains last week, adding to this month’s strong rally. The S&P 500, Nasdaq and Dow are all up at least 5% in June.
Disney shares slipped 0.5% after an analyst at Imperial Capital downgraded the stock to in-line from outperform, citing a “record ” valuation.
Shares of auction house Sotheby’s shot up nearly 60% on news it will be bought for $3.7 billion by BidFair USA, a company owned by telecom businessman Patrick Drahi. Array BioPharma shares also surged nearly 60% after the company was acquired by Pfizer for $10.6 billion.
—CNBC’s Silvia Amaro contributed to this report.