US stocks ended sharply higher on Monday as investors focused on Tuesday's midterm elections that will determine control of Congress, while shares of Meta Platforms jumped on a report of job cuts at the Facebook parent.

Republicans are favoured to win a majority in the House of Representatives in the elections, with the Senate rated a toss-up by nonpartisan forecasters. Republicans could use a majority in either chamber to hinder Democratic President Joe Biden's agenda.

"The likelihood that the Republicans take the House or the Senate is pretty high, therefore guaranteeing some form of gridlock over the next couple of years. That would probably take tax hikes off the table, and any sort of big spending potentially perceived as inflationary off the table," said Ross Mayfield, an investment strategy analyst at Baird.

Meta Platforms jumped over 6 percent following a report that the company was planning to begin large-scale layoffs this week. The stock has slumped more than 70 percent so far this year.

Recently beaten-down shares of Microsoft and Google-parent Alphabet each rallied more than 2 percent and contributed heavily to the S&P 500's gain for the session.

Focus this week will also be on US consumer prices data for October, due out on Thursday, for clues about how much the US Federal Reserve's rapid interest rate hikes are helping cool down the economy.

Four Fed policymakers on Friday indicated they would consider a smaller rate hike at their next policy meeting, despite new data showing another month of robust job gains and only small signs of progress in lowering inflation.

Traders are divided about whether the Fed will raise interest rates by 50 basis points or 75 basis points at the US central bank's meeting in December.

"All else equal, whether the terminal rate sits at 4.5 percent , 5 percent or beyond, monetary policy is poised to have a negative effect on the economy heading into 2023," Glenmede's investment strategists wrote in a note on Monday.

The S&P 500 climbed 1.0 percent to end the session at 3,806. The Nasdaq gained 0.9 percent to 10,564, and the Dow Jones Industrial Average rose 1.3 percent to 32,827..

All the three major US indexes have slumped this year, with the tech-heavy Nasdaq down 33 percent due to worries that aggressive monetary policy tightening could cripple the US economy.

Digital World Acquisition surged 66 percent after former US President Donald Trump hinted at another White House bid. The blank-cheque firm has agreed to take social-media startup Trump Media & Technology Group public. (Reuters)