Last week saw U.S. stock markets hitting record highs, with the Nasdaq Composite and S&P 500 finishing at all-time closing levels. The Dow Jones Industrial Average wasn’t far behind, ending just 113 points short of its peak. The market outlook improved as a series of newly announced trade agreements between the U.S. and countries like Japan, Indonesia, and the Philippines added to investor optimism. This positive sentiment was further supported by ongoing declines in jobless claims, helping to ease concerns surrounding the now-passed August 1 tariff deadline.
However, the upbeat market outlook could face challenges this week. Investors are turning their attention to a series of crucial economic events, starting with the Federal Open Market Committee (FOMC) meeting on Tuesday and Wednesday. The central focus will be on whether internal differences among Federal Reserve members—particularly Christopher Waller and Michelle Bowman, who have advocated for rate cuts—will l decisions. Despite these voices, most traders expect no change in interest rates this time around.
Adding to the week’s high stakes market outlook are two major economic indicators: Thursday’s inflation reading from the Bureau of Economic Analysis and Friday’s jobs report from the Bureau of Labor Statistics. These reports are expected to guide future monetary policy, as the Fed balances its goals of controlling inflation and maximizing employment.
Corporate Earnings Surge, Big Names Set to Report
This week also marks the busiest stretch of the second-quarter earnings season, shaping the market outlook further as about 150 companies in the S&P 500 reporting their results. Among the most anticipated are four members of the “Magnificent Seven”—Meta Platforms, Microsoft, Amazon, and Apple. The week kicks off with earnings from companies like Brown & Brown and Waste Management on Monday.
Tuesday is especially packed, featuring reports from Procter & Gamble, Visa, PayPal, and Starbucks. Meanwhile, Meta and Microsoft are set to share their earnings on Wednesday. The spotlight will shift to Amazon, Apple, and Mastercard on Thursday, followed by major oil players Chevron and Exxon Mobil rounding out the week on Friday. So far, roughly one-third of S&P 500 companies have reported, with more than 80% exceeding both earnings-per-share and revenue expectations.
In addition to earnings, Tuesday will see the release of the S&P CoreLogic Case-Shiller Home Price Index, the Conference Board’s Consumer Confidence Index, and the Job Openings and Labor Turnover Survey. These will offer deeper insights into consumer behavior and labor market trends. Notably, job openings are expected to fall slightly to 7.45 million in June, while consumer confidence is projected to improve modestly to a reading of 96.
Jobs and Inflation Data to Shape Fed’s Next Move
Key economic indicators will define the tone for markets moving forward. On Wednesday, ADP is scheduled to release its National Employment Report, forecasting an 80,000-job gain in the private sector after a 33,000 loss in June. Also due is the advance GDP estimate for the second quarter, expected to show 2.4% growth after a 0.5% decline in the first quarter.
Thursday brings the release of the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge. It’s expected to show a 2.5% year-over-year increase, with the core index remaining steady at 2.7%. Finally, Friday’s big event is the July jobs report. Economists forecast a 106,000 increase in nonfarm payrolls and a slight rise in unemployment to 4.2%.
Also on Friday, the Institute for Supply Management will unveil its Manufacturing PMI for July. Analysts expect a reading of 49.5, still below the 50 threshold that signals growth, suggesting continued contraction in the manufacturing sector.
With markets riding high and a full calendar of economic data, corporate earnings, and Fed commentary ahead, the market outlook suggests a potentially volatile week as investors brace for significant shifts.
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