Dow Jumps 529 Points Ahead of Interest Rate Hikes

Stocks closed higher on Wall Street Monday at the start of a busy week in which central banks are likely to unload the year’s final barrage of interest rate hikes meant to drive down painfully high inflation. The S&P 500 rose 56.18 points, or 1.4%, to 3,990.56. The Dow Jones Industrial Average rose 528.58 points, or 1.6%, to 34,005.04. The Nasdaq rose 139.12 points, or 1.3%, to 11,143.74. On Wednesday, markets expect the Federal Reserve to announce a more modest increase to rates than it has been pushing through recently, the AP reports. Other central banks around the world, including many in Europe, are also expected to raise rates by half a percentage this week.

Microsoft rose 2.9% and was the biggest single force lifting the S&P 500. The London Stock Exchange Group agreed to a 10-year deal where it will move data to Microsoft's cloud and spend at least $2.8 billion. Microsoft is also taking a 4% ownership stake in the company. Shares in Horizon Therapeutics jumped 15.5% after Amgen announced it would acquire the biopharmaceutical company for about $26.4 billion. Stocks of energy producers were also making big gains after the price of oil rose. Last week, crude prices scraped their lowest levels of the year on worries about a weakening global economy, which would mean less demand for energy.

The next big milestone for markets comes Tuesday, when the US government releases the latest update on inflation at the consumer level. Economists forecast that inflation slowed to 7.3% last month from 7.7% in October. The data will arrive as the Fed begins its two-day policy meeting on what to do with interest rates. The Fed has hinted it will dial down the size of its rate hikes, leading to expectations for a more modest increase of 0.50 percentage points Wednesday. That would follow four straight mega-hikes of 0.75 percentage points. In overseas stock markets, Asian indexes fell amid signs of a surge in coronavirus infections in China. The country is in the midst of easing some of its "zero COVID" pandemic restrictions, which had stifled the world's second-largest economy. (More stock market stories.)