US stocks closed higher on growing expectations that the Federal Reserve (Fed) will cut its target funds rate in December.
The rise was also supported by the strength of the 'Magnificent Seven' stocks that drove the Nasdaq index to a record high.
This situation helped investors reduce concerns about high valuations in the technology sector.
The Dow Jones Industrial Average rose 0.44% to 46,448.27 points, the S&P 500 jumped 1.55% to 6,705.12 points, while the technology-focused Nasdaq rose 2.69% to 22,872.01 points.
Economic reports delayed by the US government shutdown showed a weak labor market and inflation remaining high, thus reinforcing expectations that the Fed will cut interest rates at its December meeting.
Dovish comments from Fed Governor Christopher Waller, New York Fed President John Williams and San Francisco Fed President Mary Daly provided some support for that optimism, although other policymakers voiced differing views.
According to CME FedWatch, financial markets are now pricing in an 85% chance of a rate cut, up from 42.4% last week.
The focus now shifts to key economic data releases this week including the Producer Price Index (PPI), retail sales and durable goods orders, as well as independent indicators such as Case-Shiller home prices, consumer confidence and pending home sales.
Volume on US exchanges was $18.32 billion, compared to a 20-day average of $19.94 billion.
