Wall Street enters the new week with momentum. The S&P 500 gained 2.5%, the Nasdaq Composite hit a fresh record close with nearly a 4% weekly jump, and the Dow Jones added 1.4%. Tech stocks led the rally, boosted by Apple’s $100 billion US investment plan and continued AI optimism.

Now, the spotlight turns to inflation data and the Federal Reserve’s next move, with traders increasingly betting on rate cuts before year-end.

CPI Report Could Set September’s Fed Decision

The July Consumer Price Index (CPI), due Tuesday, will be the week’s most important release.

  • Headline CPI: Expected +2.8% YoY (vs. +2.7% in June)
  • Core CPI (ex-food and energy): Expected +3% YoY (vs. +2.9% in June)

Economists point to Trump’s tariffs as a driver of renewed price pressures. UBS’s Alan Detmeister sees core CPI climbing to 3.5% by year-end as tariff effects ripple through supply chains.

Wholesale inflation (PPI) lands Thursday, while Friday’s University of Michigan sentiment survey could show how consumers are feeling the pinch.

Fed Rate Cut Debate Intensifies

The Fed’s September meeting looms large. Weak July jobs data and Trump’s nomination of Stephen Miran to the Fed Board — a known advocate for easier policy — have fueled expectations of an earlier cut.

JPMorgan’s Michael Feroli says if Miran is confirmed before September, dissent within the Fed could push Powell toward a 25 bp cut sooner than planned.

This week’s Fed speakers — Richmond’s Barkin, Chicago’s Goolsbee, and Atlanta’s Bostic — may drop more hints on timing.

Earnings Spotlight: AI, Data Centers, and Stablecoins

While the bulk of S&P 500 earnings season is over, several key reports could sway sentiment:

Tuesday

  • CoreWeave (CRWV) – Nvidia-backed cloud firm; recently announced a $6B Pennsylvania data center investment.
  • Circle Internet Group (CRCL) – Stablecoin issuer; IPO surged over 400% since June. First report under the new GENIUS Act crypto framework.
  • Cava Group (CAVA) – Fast-casual restaurant chain after strong recent comps.

Wednesday

  • Cisco Systems (CSCO) – Networking giant; last quarter saw AI-driven demand push revenue higher.

Thursday

  • Applied Materials (AMAT) – Semiconductor equipment maker; barometer for chip manufacturing demand.
  • Deere & Company (DE) – Agricultural and construction machinery; key view into industrial spending.
  • JD.com (JD) – Major Chinese e-commerce player amid ongoing US-China trade tensions.

Other Key Data to Watch

  • Thursday: Initial jobless claims, PPI (July)
  • Friday: July retail sales (+0.5% expected), industrial production, import/export prices, Empire State manufacturing

Why It Matters for Markets

The week could answer the market’s biggest question:

Can the Fed cut rates to support growth without triggering recession fears that pull money from risk assets into necessities?

As Richard Bernstein notes, when rate cuts come amid solid growth, speculation can thrive. But if cuts are forced by a sharp slowdown, “people stop speculating on bitcoin — they buy bread.”

CPI will be the pivot point. A softer reading could cement September rate-cut bets and extend the rally, while a hotter print might rattle stocks and push yields higher — just as tech earnings test the AI trade’s staying power.

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

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