US stocks extend gains as rate-cut hopes linger

Despite Disney's drag, the three main U.S. stock indexes were trading at a more than three week high after a weaker-than-expected last week fueled bets that the U.S. central bank will cut rates.

The data and better-than-expected have helped soothe investor jitters around sticky and a robust economy that have kept the rates elevated.

"We've just come through an earning season that has improved people's perception of the earnings outlook, we're in this period where we don't see a ton of upside but certainly think that the pro-risk environment we've seen for the past week or so continues in the coming month," said Greg Boutle, head of US equity and derivative strategy at .

He also added that the market "can't go straight from being worried about the economy being too hot to too cold overnight."

Traders are anticipating rate cuts of 46 basis points (bps) from the Fed by the end of 2024, according to 's interest rate probabilities app, with the first pivot to rate cut seen in September and another in December. They were expecting only one cut before the labor report last week.

At 11:22 a.m. ET, the Industrial Average rose 86.20 points, or 0.22%, to 38,938.47. The S&P 500 gained 15.31 points, or 0.30%, to 5,196.05 and the Composite gained 37.65 points, or 0.23%, to 16,386.89.

The S&P 500 and the looked to extend gains for a fourth straight session in what would be their longest winning streak since March. The Dow was set for a fifth consecutive day of gains, its longest run of gains since December 2023.

Megacap stocks such as Alphabet, Meta Platforms and Amazon rose between 0.4% and 1.6%, boosting the main indexes.

Nvidia fell 1.7% after the Wall Street Journal reported that Apple was developing its own chip to run artificial intelligence (AI) software in data centers.

Apple gained 0.4% as it introduced a new chip called the M4, but put the new chip in an iPad Pro model rather than a laptop.

Tesla fell 2.7% after data showed the U.S. automaker sold 62,167 China-made electric vehicles in April, down 18% from a year earlier.

Palantir Technologies tumbled almost 14% after the data analytics firm's annual revenue forecast fell short of analysts' estimates.

Advancing issues outnumbered decliners by a 2.7-to-1 ratio on the NYSE and 1.7-to-1 ratio on the Nasdaq.

The S&P 500 posted 42 new 52-week highs and two new lows while the Nasdaq recorded 108 new highs and 52 new lows.