U.S. stocks rose strongly to kick off the third quarter Monday in light pre-holiday trading.

A slowdown in monthly manufacturing activity and construction spending was unexpected but nonetheless reinforced views that a moderating economy would keep the U.S. Federal Reserve from raising interest rates much further, as did a drop in prices paid by producers.

Volume was light ahead of U.S. Independence Day. Wall Street equity markets closed at 13:00 ET, and will be closed Tuesday.

Canadian markets were closed Monday in observance of Canada Day but will reopen Tuesday.

The Dow Jones industrial average closed up 77.80 points, or 0.7%, to 11,228.02.

The S&P 500 gained 9.99 points, or 0.79%, to 1,280.19, and the tech-heavy Nasdaq composite index climbed 18.34 points, or 0.84%, to 2,190.43.

In economic news, the Institute for Supply Management’s June manufacturing index fell 0.6 points to 53.8. Economists had forecast a rise to 55.

Meanwhile, the U.S. Commerce Department said construction spending dipped 0.4% in May.

Overseas, Japan’s Nikkei stock average climbed 0.43% in its third straight day of gains. Britain’s FTSE 100 rose 0.87%, Germany’s DAX index added 0.52% and France’s CAC 40 was higher by 0.3%.