The S&P 500 and Nasdaq Composite are hovering near record highs, despite growing uncertainty over tariffs and interest rate policy. Last week, the Nasdaq rose 1.6%, while the S&P 500 gained 0.7%. The Dow Jones remained flat.
This week, 112 S&P 500 companies are set to release quarterly earnings. Markets are watching reports from Alphabet, Tesla, and Chipotle for signals on consumer resilience.
Meanwhile, Federal Reserve Governor Christopher Waller called for a rate cut in July, arguing that inflation is under control and the Fed shouldn’t wait for the labor market to weaken. However, market pricing has shifted: investors now assign just a 5% chance of a July rate cut, down from 13% a month ago.
Citi economists expect a September rate cut, as signs point to a softening job market but no tariff-driven inflation surge.
On the earnings front, the S&P 500 is tracking for 5.6% earnings growth, above last week’s 4.8% forecast, according to FactSet. Big banks and Netflix reported strong results, noting that U.S. consumer spending remains robust.
With the Federal Reserve entering its blackout period, investors will focus on services and manufacturing data in the days ahead.