NEW YORK, May 6 -- U.S. stocks rallied on Monday, as investors lifted Federal Reserve rate cut expectations.

The Dow Jones Industrial Average rose 176.59 points, or 0.46 percent, to 38,852.27, posting its fourth consecutive daily gain. The S&P 500 added 52.95 points, or 1.03 percent, to 5,180.74 in its third straight daily gain. The Nasdaq Composite Index increased by 192.92 points, or 1.19 percent, to 16,349.25.

Ten of the 11 primary S&P 500 sectors ended in green, with technology and communication services leading the gainers by going up 1.48 percent and 1.39 percent, respectively. Meanwhile, real estate bucked the trend by dropping 0.02 percent.

Federal Reserve Bank of New York President John Williams said on Monday the U.S. central bank intends to reduce its interest rate target at an unspecified time in the future. While Williams did not provide a specific timetable for this action, he mentioned that the economy was gradually moving towards a more stable state, accompanied by a transition to a slower pace of growth.

"Eventually we'll have rate cuts" but for now monetary policy is in a "very good place," he said.

Richmond Fed President Tom Barkin also remarked on Monday that the U.S. economy is expected to decelerate in the upcoming months, which in turn should contribute to easing inflationary pressures.

Barkin expressed the view that the economy is not experiencing overheating and highlighted that recent fluctuations in U.S. economic data support the Fed's cautious stance regarding interest rate adjustments. "I am optimistic that today's restrictive level of rates can take the edge off demand in order to bring inflation back to our target," he said.

Investors are still digesting new U.S. economic data released last week. The weaker GDP data and mixed jobs report offer "the idea that the economy is cooling, and it kind of reinvigorates the hope that the Fed will be reducing rates as the year goes on," according to Steve Courtney, managing director and portfolio manager for PGIM Quantitative Solutions.

The benchmark 10-year yield slipped to 4.491 percent as of 4 p.m., for the fourth consecutive trading day on Monday. Investors continue to monitor notable companies reporting earnings this week, such as Disney on Tuesday and Uber on Wednesday, even as the peak of the first-quarter earnings season has subsided.

Warren Buffett's Berkshire Hathaway reported a significant 40 percent increase in operating earnings for the first quarter compared to the previous year and held its annual shareholders meeting on Saturday.

  - Xinhua