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May 6 (Reuters) - U.S. stock indexes closed higher on Monday, their third straight session of advances, as investors continued to gain hope that there was a greater chance of the Federal Reserve cutting interest rates this year.

Expectations for rate cuts by the U.S. central bank have been tempered as the year has progressed, as inflation has proven stickier, and some investors had begun to worry they might not materialize at all, sending markets lower in April.

However, data on Friday showed U.S. job growth slowed more than expected in April, taking pressure off the U.S. central bank to keep rates higher for longer. Coupled with earnings season in corporate America surprising to the upside, this has given investors renewed positive moment in recent sessions.

After the Fed last week signaled it was leaning towards eventual reductions in borrowing costs, but wanted to gain "greater confidence" that inflation will continue to fall before cutting rates, policymakers reiterated that message on Monday.

Richmond Fed President Thomas Barkin said the current interest rate level should cool the economy enough to return inflation to the central bank's 2% target, with the strength of the job market giving officials time to wait.
Barkin, a voter this year on interest rate policy, added that inflation "data whiplash" supported the Fed's deliberative policy towards interest rates.
Meanwhile, Federal Reserve Bank of New York President John Williams said while rate cuts would happen, monetary policy was currently in a very good place.

The video player is currently playing an ad. "The primary thing that the market is trying to reason its way through is inflation and the Federal Reserve," said Jason Pride, chief of investment strategy & research at Glenmede. "A lot of the market's movements have been a reflection of the market really trying to figure out and fine tune the different perspectives on inflation and rates." Traders are currently pricing in rate cuts worth 46 basis points from the Fed by the end of 2024, with the first cut expected in September or November, according to LSEG's rate probability app. Advertisement · Scroll to continueReport this ad The Dow Jones Industrial Average (.DJI) rose 176.59 points, or 0.46%, to 38,852.27, the S&P 500 (.SPX) gained 52.95 points, or 1.03%, to 5,180.74 and the Nasdaq Composite (.IXIC) gained 192.92 points, or 1.19%, to 16,349.25. The majority of S&P 500 sectors ended in positive territory.