The Globe and Mail reports in its Tuesday edition that U.S. stocks registered modest gains on Monday but managed to close at new highs for the year, ahead of major market catalysts this week that include inflation readings and the Federal Reserve's policy announcement. A Reuters dispatch to The Globe says that Canadian stocks ended slightly lower. Market watchers increasingly believe the U.S. central bank is done with its interest rate hike cycle and could potentially cut rates in the first half of next year. These expectations have helped fuel a rally in equities in recent weeks that sent each of the three major indexes to their highest closing levels of the year. While markets had been pricing in a better-than-50-per-cent chance of a rate cut in March by the Fed last week, data on Friday showed job growth accelerated and the unemployment rate dipped, while a separate report showed consumer inflation expectations had dropped. The data raised hopes the inflation could continue to decelerate without the economy falling into a recession and expectations for a March cut softened. Toronto ended at 20,318.36, down 13.18. The energy sector fell 1.2 per cent even as the price of oil settled higher at $71.32 (U.S.) a barrel.