The U.S. stock index rose early Monday after the S & P 500 rose for the third week in a row, but investors also turned their attention to this week's key inflation report.

The Dow Jones industrial average rose 219 points, or 0.7%. The s & p 500 and the Nasdaq composite index rose 0.7% and 0.8%, respectively.

Monday's rally followed gains in both the S & P 500 and the Nasdaq composite index last week as the unexpectedly strong monthly jobs report eased some recession fears. The strong job market also shows that the US economy can withstand further interest rate increases by the Federal Reserve.

John Stoltsfuss, chief investment strategist at Oppenheimer, said in a note to clients: "based on economic data and corporate earnings released as of Friday, we believe the stock market rally since the June 16 low will be supported. "

Affected by the shift in market perception of Fed policy, the stock market has fluctuated in recent days. Friday's better-than-expected jobs report divided investors and analysts. Some worry that the Fed may continue to raise interest rates sharply, while others question whether the US economy will really fall into recession.

The market is still digesting Friday's jobs report. When you look at what is happening in the labour market, it doesn't look like a recession in a broad sense, "says Kiran Ganesh Ganesh, multi-asset strategist at UBS. Investors seem to want to hear the good news. "

August volumes also tend to be low, analysts say, as many traders are on vacation, which could lead to fewer volumes and more volatility. Investors still in the office are waiting for US inflation data for July, released on Wednesday, which is expected to provide more direction for the market.

Consumer price index (CPI) data, due to be released on Wednesday, will give investors a better idea of what the Fed will do next at its September policy meeting. Traders now expect a 0.75 percentage point rate hike next month to be more likely, the third consecutive 75 basis point hike.

Overall CPI, which includes energy and food, is expected to fall to 8.7 per cent in July from a 40-year high of 9.1 per cent in June, according to market estimates.

The yield on the benchmark 10-year Treasury note fell slightly to 2.797% from 2.838% on Friday, and the yield curve continued to flash recession signals, with a two-year yield of 3.214%.

Our conclusion from the bond market is that investors are preparing for an economic slowdown. The bond market has increasingly begun to factor in the likelihood of a 75 basis point interest rate hike in September, "said Karim Karim Chedid, investment strategist at Blackrock, BlackRock.

Nevertheless, the stock market still has some support. I think it has something to do with better-than-expected earnings so far this season, "Childe said."

Some clean energy-related stocks rose after US authorities passed a $430 billion climate bill to reduce inflation, which is expected to be passed by the House of Representatives later this week. Invesco solar ETF rose 1.7 per cent in morning trading.

Results from video game company Take-Two Interactive Software, vaccine maker Novavax, insurance company AIG and News Corp will be released after the close.