U.S. stocks closed modestly higher today as investors assessed whether a trend will develop in the week following the Federal Reserve’s rate cut.

The gains came amid comments from Fed policymakers and steady factory activity data, building on last week’s sharp market rally after the central bank’s decision to lower interest rates.

The Fed’s pivotal move last week pushed major indexes to monthly gains, defying the historical trend of September as a weak month for equities.

Comments today from three reserve bank presidents were the main focus as investors searched for clues on why the central bank kicked off its easing cycle with an outsized 50 basis-point cut.

Fed officials including Raphael Bostic, Neel Kashkari and Austan Goolsbee supported the central bank’s last rate cut and voiced support for more cuts in the rest of the year.

Trader bets, as per the CME Group’s FedWatch tool, initially favored a larger Fed move at its upcoming November meeting, after Governor Christopher Waller on Friday flagged that upcoming inflation data could undershoot the Fed’s 2% target.

However, the bets have swayed since then and now appear to be a coin toss, with markets expecting a total reduction of 74 basis points by year-end, according to LSEG data.

On the data front, U.S. business activity remained steady in September, while average prices for goods and services increased at the fastest pace in six months, potentially signaling a rise in inflation in the months ahead.

“I think investors are still just sort of taking a wait-and-see attitude if indeed a soft landing is the most likely outcome,” said Sam Stovall, chief investment strategist of CFRA Research in New York.

According to preliminary data, the S&P 500 gained 15.90 points, or 0.28%, to end at 5,718.45 points, while the Nasdaq Composite gained 24.87 points, or 0.14%, to 17,974.27. The Dow Jones Industrial Average rose 60.74 points, or 0.14%, to 42,124.10.

All eyes are on Friday’s personal consumption expenditures figure for August – the Fed’s preferred inflation gauge. Analysts say this release will be the week’s most significant catalyst.

Additional reporting by Johann M Cherian and Purvi Agarwal in Bengaluru.