A Commerce Department report showed US consumer spending increased by the most in more than 9-1/2 years in March, but a key inflation measure posted its smallest annual gain in 14 months.
Tame inflation supports the Fed’s recent decision to suspend further interest rate increases this year.
As trade talks enter their last leg, US negotiators head to China on Tuesday to try to hammer out details to end the protracted tariff spat between the two countries.
US Treasury Secretary Steven Mnuchin, in a television interview that aired on Monday, said he hopes that the latest talks between the United States and China may seal a trade deal.
«It’s really about the administration continuing to hint a trade agreement is near,» said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey. «People don’t want to miss out on the expected rally from that news.»
The Dow Jones Industrial Average rose 11.06 points, or 0.04 per cent, to 26,554.39, the S&P 500 gained 3.15 points, or 0.11 per cent, to 2,943.03 and the Nasdaq Composite added 15.46 points, or 0.19 per cent, to 8,161.85.
The Fed starts a two-day meeting on Tuesday, at the end of which a decision on interest rates will be announced.
Another busy week of earnings is expected, with results due from Google parent Alphabet Inc and Apple Inc among other top names.
Analysts now expect earnings of S&P 500 companies to have fallen just 0.2 per cent in the first quarter, a sharp improvement from a 2 per cent fall estimated at the beginning of the month, according to IBES data from Refinitiv data.
Ingersoll-Rand shares jumped 6.5 percent after the Wall Street Journal reported Gardner Denver Holdings Inc is nearing a deal to acquire a unit of the air conditioner maker.
Advancing issues outnumbered declining ones on the NYSE by a 1.57-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored advancers.
The S&P 500 posted 38 new 52-week highs and no new lows; the Nasdaq Composite recorded 79 new highs and 25 new lows.
Volume on US exchanges was 5.81 billion shares, compared to the 6.56 billion average over the last 20 trading days.