Wall Street Rides High on Recession Evasion and Rate Cut Hopes

Wall Street extended gains as the dollar dipped lower amidst expectations of the U.S. economy avoiding a recession and the beginning of interest rate cuts. Early trading saw rising indices, and analysts noted possible easing in September. Investors are closely watching upcoming data and Federal Reserve decisions.

Wall Street extended gains as the dollar tipped lower on Monday, following last week's surging stock markets driven by expectations that the U.S. economy would dodge a recession and cooling inflation would trigger a cycle of interest rate cuts. The Dow Jones Industrial Average rose 0.29% to 40,779.28, the S&P 500 gained 0.19% to 5,564.56, and the Nasdaq Composite added 0.10% to reach 17,649.30 in early trading on Monday.

Meanwhile, MSCI's broadest index of world stocks edged up by around 0.2%. The prospect of lower borrowing costs hit gold's historic highs, and the dollar dipped against the euro while the yen surged higher.

In the U.S., Federal Reserve members Mary Daly and Austan Goolsbee signalled the potential for easing in September over the weekend. Minutes from the last policy meeting are expected to underline this dovish outlook ahead of Fed Chair Jerome Powell's speech in Jackson Hole on Friday. Investors are keenly watching for any indications of upcoming rate cuts, and questions remain on the magnitude of such cuts.