U.S. markets and stock ETFs pushed higher Monday, with the S&P 500 and Nasdaq benchmarks touching record highs, as strong economic data and muted inflation help sustain the rally.

On Monday, the Invesco QQQ Trust (NASDAQ: QQQ) was 0.1% higher, SPDR Dow Jones Industrial Average ETF (NYSEArca: DIA) was up 0.1% and SPDR S&P 500 ETF (NYSEArca: SPY) gained 0.2%.

The Commerce Department revealed U.S. consumer spending rose by the most in over nine-and-a-half years over March while pricing pressures remained muted, with a key inflation gauge posting its smallest annual rise in 14 months, underscoring the Federal Reserve’s dovish stance on interest rates ahead, Reuters reports.

“The record highs shows us that investors are paying attention to better-than-expected earnings, stabilizing economic data and the expectations that the Fed is going to stay on the sidelines,” Ryan Nauman, market strategist at Informa Financial Intelligence, told Reuters. “If we look deeper into earnings numbers, its not that great, but we now know that the economy is expanding and the Fed is continuing to stay on the sidelines.”

Federal Open Market Committee Announcement

Looking ahead, investors will be waiting on the Federal Open Market Committee’s announcement on interest rates at the end of a two-day meeting starting Tuesday.

The better-than-anticipated earnings season has also supported the rally in U.S. equities. About 160 S&P 500 companies are set to report quarterly results this week. Analysts now project profits of S&P 500 companies will dip 0.2%, compared to previous expectations of a 2% decline at the start of the month, according to Refinitiv data.

“The market was pricing in almost all of the worst-case scenarios. Now that we’re actually getting earnings, they’re not as bad as” many investors had feared, Nancy Perez, senior portfolio manager and managing director at Boston Private, told the Wall Street Journal.

Additionally, with trade talks heading toward the last innings, U.S. negotiators are scheduled to talk in China Tuesday to go over the finer details of a prolonged trade war.

For more information on the markets, visit our current affairs category.

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