The Dow Jones index gained 1.16% to 35,473.13 points, the tech-heavy Nasdaq advanced 0.61% to 13,994.40 points and the S&P 500 index gained 0.90% to 4,518.44 points.

"We got off to a good start. Investors are once again focused on corporate earnings," said Peter Cardillo of Spartan Capital Securities.

Weighed down by the downgrading of US debt by Fitch last week and the announcement of a flood of bond issues to come from the US Treasury, the bond market had tightened sharply last week, leading to a decline in stock market indices.

Over the week, the Dow Jones had dropped 1.1% after three positive weeks. The broader S&P index lost 2.3% and the Nasdaq fell 2.8%.

"The fact that we had this decline has been healthy for the market," Cardillo said.

Investors will focus mainly on inflation as the CPI consumer price index for July is released on Thursday. Analysts expect prices to have continued to rise 0.2% last month. Over one year they forecast inflation to rise to 3.3%, more than in June (+3%).

U.S. central bank (Fed) Governor Michelle Bowman reiterated Monday that inflation "remains well above the Fed's 2% annual target." She also stressed that "the labour market remains tight with more job offers than workers available".

"Under these conditions, I was in favor of a rate hike in July and I expect that further hikes will be needed to lower inflation towards the Monetary Committee's target," the committee voting member added. The Fed's next monetary decision is scheduled for September 20.

New York Fed President John Williams said the Fed's rate level "is very close to the peak." "The question is how long to keep this restrictive level of rates," he said in an interview Monday with the New York Times.

In the bond market, yields on ten-year Treasuries rose to 4.09% from 4.03% on Friday. They had stretched to 4.20% last week.

The dollar was stable.

On the market, the electronic payments company PayPal was sought after (+2.66%) after announcing the launch of its own "stablecoin", a so-called stable cryptocurrency because it will be backed by the dollar and US Treasuries in the short term. This token called PYUSD can be used to buy products or be converted into other currencies.

Electric vehicle maker Lucid, which announced worse-than-expected results after the close but confirmed its full-year forecasts, fell 3.17 percent but gained 3.56 percent in electronic trading. It has also just lowered the price of some of its models.

Rival Rivian fell 3.88%. Tesla closed down 0.95%.

Intelligence firm Palantir (-1.15% at the close) dropped 3.50% after the market closed, although it raised its full-year revenue projection to $2.21 billion thanks to strong demand for services using artificial intelligence.

Paramount, which on Monday announced the sale of publishing house Simon and Schuster to investment group KKR for $1.62 billion, took 5.53% in electronic trading after the close after having already finished up 2.94%.

© 2023 AFP