All three major U.S. stock indexes gained momentum as day progressed, closing the session at their highest close of the year

U.S. stocks closed in positive territory and gold slipped on Monday, as investors looked ahead to crucial inflation data and the U.S. Fed’s two-day monetary policy meeting.

In a busy week for central banks, the yen softened for a second consecutive day as expectations faded for the Bank of Japan to shift to a less dovish policy.

All three major U.S. stock indexes gained momentum as day progressed, closing the session at their highest close of the year.

Gold declined to a near three-week low as the dollar strengthened.

There is a lot we do not know about this week: we do not know what inflation is going to be, we do not what the Fed is going to do and we do not know what retail sales are going to do, said Rob Haworth, senior investment strategy director at U.S. Bank Asset Management Group. And on the back of all that investors seem to be feeling OK about the market.

The U.S. Labor Department’s closely watched CPI report, due on Tuesday, is expected to show inflation still cooling but staying well above the Fed’s 2 per cent annual target.

The FOMC two-day monetary policy meeting will end on Wednesday with its interest rate decision and the release of its summary economic projections.

While the Fed is largely expected to let the Fed funds target rate stand at 5.25 per cent-5.50 per cent, market participants will parse the Fed’s dot plot and summary economic projections to evaluate its likely path forward.

Interest rate decisions are also expected from the ECB on Wednesday and the BoE on Thursday.

We have had coordinated central bank policies for some time, locking arms as they battle inflation and send rates to high levels, Haworth said. But they could start to break ranks. Inflation seems to be dropping faster and the economy weakening more in Europe than in the U.S.

The Dow Jones Industrial Average gained 157.06 points, or 0.43 per cent, to 36,404.93, the S&P 500 added 18.07 points, or 0.39 per cent, to 4,622.44 and the Nasdaq Composite shed 34.64 points, or 0.24 per cent, to 14,432.49.

European shares notched modest gains ahead of key U.S. economic data and interest rate decisions from major central banks.

The pan-European STOXX 600 index gained 0.30 per cent and MSCI’s gauge of stocks across the globe added 0.29 per cent.

Emerging market stocks shed 0.15 per cent. MSCI’s broadest index of Asia-Pacific shares outside Japan ended 0.21 per cent down, while Japan’s Nikkei advanced 1.50 per cent.

U.S. Treasury yields were little changed after weak 3- and 10-year note auctions.

Benchmark 10-year notes last advanced 1/32 in price to yield 4.2409 per cent, from 4.245 per cent late on Friday.

The 30-year bond last dropped 2/32 in price to yield 4.3285 per cent, from 4.326 per cent.