US equity indexes closed higher on Friday as markets looked ahead to the Federal Reserve's latest monetary policy decision, due this week. The Dow and the Nasdaq both rose 0.7%, reaching 41,393.8 and 17,684, respectively, while the S&P 500 gained 0.5%, closing at 5,626.
For the week, the Nasdaq jumped nearly 6%, the S&P 500 advanced 4%, and the Dow was up 2.6%.
The Federal Open Market Committee's (FOMC) two-day meeting is scheduled to begin on Tuesday.
Investors currently see a 55% probability that the FOMC will lower its benchmark lending rate by 0.25% on Wednesday, with the remaining odds favouring a more aggressive 50-basis-point reduction.
Brokers at Jefferies expect policymakers to reduce rates by 25 basis points.
"We expect the language in the policy statement to change significantly, reflecting a shift in the balance of risks to the downside for the labour market and towards greater confidence in achieving the FOMC's 2% inflation goal over time," the brokerage said in a Friday note to clients.
"This will set the stage for additional rate cuts at upcoming meetings."
The US two-year yield fell 5.9 basis points to 3.59%, while the 10-year rate dropped 2.1 basis points to 3.66%.
