U.S. stocks rise as traders price in more Fed rate cuts this year

U.S. stocks opened higher on Monday as investors grew more confident that the Federal Reserve could begin cutting interest rates later this year. The move reflected a shift in market expectations after recent economic data reinforced bets that policy may soon become less restrictive.

Major indexes edged up in early trading, with gains driven by sectors that typically benefit when borrowing costs fall. Lower rates can support corporate profits, reduce financing pressure, and improve the outlook for growth-sensitive companies, helping lift investor sentiment.

Markets have been watching the Fed closely for signs of when officials may pivot from holding rates steady to easing policy. Traders are now assigning a higher probability to cuts in the months ahead, even as policymakers continue to balance inflation risks against signs of cooling demand.

The latest advance adds to a broader market narrative shaped by expectations of slower economic growth and a possible shift toward more supportive monetary policy. Investors will keep looking to upcoming data and Fed commentary for clues about the pace and timing of any rate changes.