(Updates with preliminary closing prices at 4:00 p.m ET/ 2000

GMT)

By Sinéad Carew and Shubham Batra

Sept 9 (Reuters) -

Wall Street's three major indexes closed higher on Monday as

investors looked for bargains after the previous week's sell-off

while they also waited for inflation reports in coming days and

the Federal Reserve's next policy decision next week.

Investors had fled from equities last week when Friday's

weaker-than-expected August jobs data followed weak

manufacturing data on Tuesday, driving the Nasdaq Composite's

biggest weekly loss since January 2022, and the S&P

500's biggest weekly decline since March 2023.

Along with jitters about the U.S. economy's health investors

have been contending with uncertainty about the Fed's interest

rate decision due Sept. 18. But they arrived at their desks in

what looked like more bullish moods on Monday.

"Investors had a little time over the weekend to think

about things. Clearly there was an over-reaction to economic

data last week. It raised over-blown fears of a potential

recession," said Kristina Hooper, chief global market strategist

at Invesco. "A pause gives you the opportunity to be more

rational."

According to preliminary data, the S&P 500

gained 63.01 points, or 1.16%, to end at 5,471.16 points,

while the Nasdaq Composite gained 196.83 points, or

1.18%, to 16,884.60. The Dow Jones Industrial Average

rose 481.09 points, or 1.19%, to 40,826.50.

This week's key events include the consumer price index

(CPI) report, due Wednesday morning after Tuesday night's first

debate between U.S. presidential candidates Democrat Kamala

Harris and Republican Donald Trump ahead of the Nov. 5 election.

But in the meantime Phil Blancato, chief market

strategist at Osaic Wealth, New York said investors are taking

another look at "high quality stocks that are cheaper."

In particular Blancato pointed to gains on Monday in shares

of market heavyweight and artificial intelligence chipmaker

favorite Nvidia ( NVDA ), which fell 15.3% last week.

However, since trading is usually more muted before big

economic news, Blancato was concerned to see a rally before

Wednesday's CPI inflation report, which is expected to help

inform whether the Fed cuts rates by 25 or 50 basis points.

"The market's expecting a very soft print and locking in a

Fed cut. What happens if we don't get that?" said Blancato who

expects volatility after whatever decision the Fed makes.

Some investors will be disappointed if the Fed only cuts

rates by 25 basis points but if the cut is double that, they

will be worried that the Fed has big concerns about the economy.

"It's a lose-lose situation," the strategist said.

Wednesday's report is expected to show a moderation in

headline inflation in August to 2.6% on a yearly basis, while on

a monthly basis it is expected to remain unchanged at 0.2%. The

CPI report will be followed by producer prices data on Thursday.

During Monday's session, Apple Inc ( AAPL ) shares fell

after it unveiled its artificial intelligence-boosted

iPhone 16

.

Apple's ( AAPL ) long-awaited phone launch came hours after

Chinese rival Huawei began racking up orders for its

tri-fold Mate XT phone.

Boeing ( BA ) shares advanced after the planemaker and its

biggest union reached a tentative deal covering more than 32,000

workers, averting a possible strike.

Shares in Palantir ( PLTR ), Dell Technologies ( DELL ) and

Erie rose on the news issued late Friday they will all

join the S&P 500 index on Sept. 23.

In the benchmark index, these stocks will replace American

Airlines Group ( AAL ), Etsy ( ETSY ) and Bio-Rad Laboratories ( BIO/B )

.