US stocks traded higher during Monday's midday session, with technology stocks leading the advance. This week brings a data-heavy schedule, including closely watched inflation metrics - August CPI and PPI reports. Recent weak US employment data has led investors to bet that a rate cut this month is nearly certain.

The Dow Jones Industrial Average gained 20.09 points, or 0.04%, to 45,420.95; the NASDAQ Composite rose 151.46 points, or 0.70%, to 21,851.85; and the S&P 500 index advanced 16.72 points, or 0.26%, to 6,498.22.

According to FactSet data, entering Monday's trading session, the S&P 500 index was down only 0.8% from recent highs, while the tech-heavy NASDAQ Composite and the 30-component Dow Jones were also near historical peaks.

This week, investors are focusing on two key inflation reports to gain deeper insights into US economic health. The August Producer Price Index (PPI) report is scheduled for release Wednesday morning, followed by the Consumer Price Index (CPI) on Thursday.

Ahead of these data releases, Friday's disappointing nonfarm payrolls report has increased investor bets that the Federal Reserve will almost certainly cut rates at its September meeting. According to FedWatch tool trading data, the employment data has also raised the possibility of a 50-basis-point rate cut.

Standard Chartered Bank noted that the door for a 50-basis-point rate cut has opened. Given weak US job growth in August and unemployment rising to its highest level since 2021, the bank now expects the Fed to cut rates by 50 basis points next week.

Standard Chartered strategists John Davies and Steve Englander stated: "We believe August's labor market data has opened the door for a 'catch-up' 50-basis-point Fed rate cut in September, similar to this time last year." Previously, they had anticipated a 25-basis-point cut.

Tom Hulick, CEO of Strategy Asset Managers with $850 million in assets under management, said: "While we cannot be certain, the job market may be much weaker than the Fed realizes or is willing to admit. If data continues to be revised negatively, short-term Treasury yields - especially two-year yields - will have significant downside room."

Investors will use these reports to assess US economic health, hoping to determine whether US stocks can continue trading at record highs.

Markets are also watching political developments unfolding in Japan and France.

Following Japanese Prime Minister Shigeru Ishiba's resignation, the yen and long-term government bonds fell while Japanese stocks rose. Traders are betting that heightened political uncertainty will reduce the likelihood of near-term rate hikes by the Bank of Japan.

France may see its fifth prime minister in three years, as current Prime Minister François Bayrou faces a confidence vote on Monday that is expected to fail. French assets initially fell sharply after Bayrou announced the vote last month but have since recovered. On Monday, French stocks and bonds slightly outperformed European peers.

Political uncertainty in Japan and France, combined with the substantial US data due this week, will help determine the Fed's policy path. With September rate cuts already fully priced in by markets, the upcoming Consumer Price Index (CPI) and Producer Price Index (PPI) data will show how much room the Fed has to support the weakening job market.

Michael Brown, senior research strategist at Pepperstone Group, noted that investors need to consider whether US labor market weakness will dampen consumer spending, potentially creating headwinds for US stocks.

Focus Stocks

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EchoStar has reached an agreement to sell spectrum licenses to SpaceX for $17 billion.

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Takeda Pharmaceutical's orexin-2 receptor (OX2R) agonist Oveporexton showed positive results in Phase 3 trials for Type 1 narcolepsy.

Reports suggest Baidu's AI will support Siri and visual intelligence, with additional speculation that Baidu's surge stems from rumors about Kunlun chip developments.

Fangdd Network attracted attention. The stock soared 32.8% on Friday following Shenzhen's property market policies that exceeded those in Beijing and Shanghai.

CICC International expects KE Holdings to benefit from beta elasticity as the real estate sector stabilizes.

ZTO Express stock price rose amid recent express delivery price increases across multiple regions.

Analysts suggest MINISO Group has broad overseas market expansion opportunities.

XPeng Motors held a launch event in Munich and announced that its first European R&D center will officially open in Munich.

Reports indicate Pony.ai has begun Robotaxi road testing in Doha.