Currently, the Fed Funds indicator is predicting a 30 percent chance of a rate hike in September, up from 18 percent before Yellen’s speech on Friday.
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Analysts said it is possible for the Fed to hike interest rates as soon as September.
FED FACTOR: U.S. Fed Chair Janet Yellen made comments on Friday that were bullish on the economy but gave no timetable for future rate increases.
Wells Fargo (WFC.N) rose 2.5 percent and provided the biggest boost to the S&P, while JPMorgan (JPM.N) and Bank of America (BAC.N) rose about 1.1 percent. The advances helped Wall Street snap a three-day losing streak.
A report from the US Commerce Department showed consumer spending, which accounts for more than two-thirds of US economic activity, rose for the fourth straight month in July.
Investors will be looking to Japan household spending and retail sales on Tuesday, global factory activity readings on Thursday and the US non-farm payrolls report on Friday.
After rising to levels a little shy of ¥102 in late NY trading Friday, the greenback topped the threshold early Monday Oceanian time but dipped below the level later. The chances of a December rate hike have move up from 50 percent to 60 percent. Stock markets in Europe and Asia struggled today, whereas shares futures in the USA remained flat.
US economic data on Monday showed consumer spending increased for a fourth straight month, pointing to a pickup in growth that could pave the way for the Fed to raise interest rates later this year.
Europe’s broad FTSEurofirst 300 index was last down 0.19 per cent, at 1,350.13.
In late NY trading on Monday, the euro rose to $1.1190 from $1.1185 of the previous session, and the British pound decreased to $1.3114 from $1.3127, Xinhua news agency reported. The S&P 500 .SPX closed up 11.34 points, or 0.52 percent, at 2,180.38.
Against the low-yielding yen, the dollar rose 0.4 percent to 102.35 yen JPY=, just below Monday’s 102.39, its highest since August 9.
Platinum was down 2.1 per cent at $US1,050.99, the lowest since July 5. They moved initially in December, but their plans for subsequent rate increases have been derailed by worldwide developments and a spattering of weak USA data points. The 10-year Treasury note declined to 1.592% from 1.631% on Friday.
The stronger dollar also weighed on oil prices as it makes the commodity more expensive for those using weaker currencies.
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West Texas Intermediate slid 1.7 percent to 46.85 and Brent shed 1.4 percent to 49.21. USA crude was down 80 cents, or 1.68 per cent, at $46.84 per barrel. Spot gold slipped 0.1 per cent to $1,319, after earlier touching a five-week low.
