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STORY: The S&P 500 and the Nasdaq rallied on Monday to their highest closing levels since April 2022 as investors awaited inflation data and the Federal Reserve's interest rate decision this week.

The Dow added about six-tenths of one percent while the S&P 500 climbed one percent and the Nasdaq rose one-and-one-half percent.

Lifted by gains in market heavyweights like Amazon and Tesla , the S&P 500 has now recovered over 20% from its October 2022 lows. Some investors say Wall Street is the midst of a bull market. Main Street Research Founder and Chief Investment Officer James Demmert disagrees.

“U.S. markets and to some degree the overseas markets have had a nice rally over the last two months. In the shorter term, a lot of things are lining up that we're probably due for a normal pullback or correction. You know that's usually the magnitude of eight to ten percent. It certainly would bring PE ratios down to a more reasonable level.”

Demmert said market volatility remains low which has led to recent declines and also cited a technical indicator which indicates the market is significantly overbought.

Tuesday the U.S. Labor Department's consumer price index reading is expected to show inflation cooled slightly in May, with core prices likely remaining sticky. Tuesday is also the first day of the Fed's two-day meeting with a decision on interest rates out Wednesday.

Stocks making big moves included exchange-operator Nasdaq which plunged nearly 12 percent after agreeing to buy software company Adenza which analysts called an expensive bet.

And Broadcom which jumped 6 percent after Reuters reported the chipmaker was set to gain conditional EU antitrust approval for its $61 billion proposed acquisition of cloud computing firm VMware.