Wall Street stocks won solid gains Monday in an optimistic round of trading, ahead of key inflation data that will influence US monetary policy.

Market watchers awaiting Tuesday's consumer price index report have penciled in further moderation, which would ease pressure on the Federal Reserve to prolong interest rate hikes for significantly longer.

The yield on the 10-year US Treasury dipped in a sign traders expect the Fed's rate-hiking streak to end relatively soon.

"It looks as if the market is expecting a little bit of good news on inflation," said Peter Cardillo of Spartan Capital Securities.

The Dow Jones finished up 1.1 percent at 34,245, the S&P 500 also climbed 1.1 percent to 4,137, and the Nasdaq jumped 1.5 percent to 11,891.

Despite Monday's gains, some analysts expressed caution ahead of Tuesday's data.

Stocks were buffeted much of last week by worries that the Fed will enact many more interest rate hikes.

"Pricing pressures are expected to rise last month and we should not be surprised if the Valentine's day inflation report is very hot as used car prices and energy costs clearly rebounded last month," said Oanda's Edward Moya.

"Risky assets could struggle if the bond market sees more traders place bets for much more Fed tightening," he added.

Other economic releases this week include a report on retail sales on Wednesday and housing starts on Thursday, both for January. (AFP)