Market Outlook: Key Events and Earnings to Watch

The S&P 500 hit its 34th record close of the year on Friday, boosting its 2024 rally to 16.7%. The Nasdaq Composite also soared to a new high, led by gains in Tesla and Nvidia, bringing its year-to-date gain to 22.3%. Meanwhile, the Dow Jones Industrial Average edged up by 0.17%, or 67.87 points. Friday's surge came after a robust jobs report reignited hopes for rate cuts from the Federal Reserve. What to expect this week?

Key Economic Data Releases

Investors are eyeing significant economic data this week, starting with the June Consumer Price Index (CPI) on Thursday and the Producer Price Index (PPI) on Friday.

These reports will provide insights into inflation trends and could influence the Fed's policy decisions. Additionally, consumer sentiment data for July will be released, offering a gauge of public confidence in the economy.

Fed Chair's Testimony

Federal Reserve Chair Jerome Powell will update Congress on economic conditions and interest rates. His testimonies to the Senate Banking Committee on Tuesday and the House Financial Services Committee on Wednesday are highly anticipated. Lawmakers will likely press Powell on the Fed's plans for potential rate cuts this year.

Other Fed officials speaking this week include Vice Chair Michael S. Barr, Governor Michelle Bowman, and Atlanta Fed President Raphael Bostic. Their remarks could provide additional context on the Fed's outlook and policy direction.

Earnings Reports to Watch

Second-quarter earnings season kicks off this week, with major banks like JPMorgan Chase, Wells Fargo, and Citigroup set to report on Friday. These reports will be scrutinized for insights into the financial sector's health and broader economic trends.

Helen of Troy's (NASDAQ:HELE) report on Tuesday will shed light on consumer interest in beauty and wellness brands.

WD-40's (NASDAQ: WDFC) results on Wednesday will indicate the demand for industrial and cleaning products.

On Thursday, PepsiCo's (NASDAQ: PEP) update will be watched closely, especially after its Quaker Foods division's recent struggles. Delta Air Lines' (NYSE: DAL) earnings will reflect the state of travel demand and revenue growth.

Market Focus: Tesla and Bank Earnings

Tesla's (NASDAQ: TSLA) stock erased its 2024 losses with a remarkable 27% rise last week, closing at $251.55 on Friday. This surge followed a better-than-expected second-quarter deliveries report. Despite a 4.8% year-over-year decline, the deliveries exceeded Wall Street expectations and showed less decline than the first quarter.

The major banks reporting on Friday will provide a snapshot of the financial sector's health. Last quarter, JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE:WFC), and Citigroup (NYSE: C) all beat earnings expectations but reported drops in net interest income. Bank of New York Mellon's (NYSE:BK)
report will be notable after its recent $6 billion stock buyback announcement.