The Week Ahead: Markets Brace for CPI and Fed Talk This Week as Rate Cut Bets Rise

Market Overview

U.S. equities reversed lower last week, giving back recent gains as tariff concerns and weaker jobs data weighed on sentiment. The Dow fell -2.92% to close at 43,588.58, the Nasdaq lost -2.17% to 20,650.13, and the S&P 500 declined -2.36% to 6,238.01. Despite the pullback, all three indices remain positive year-to-date, led by the Nasdaq at +7.3%.

The week’s central theme is rising tariffs and softening labor data, both of which raise the odds of Fed policy action. The U.S. confirmed higher tariff rates averaging 18.3%, up from 2.4% at the start of the year, with new rates set to take effect August 7. Meanwhile, July’s nonfarm payrolls disappointed with just 73,000 jobs added vs. 104,000 expected, and the unemployment rate ticked up to 4.2%.

Despite the tariff headwind, Q2 earnings have broadly beaten expectations, with over 80% of S&P 500 companies topping estimates. Tech and AI names continue to lead, reinforcing growth leadership. Markets remain sensitive to Fed signals, particularly after Chair Powell acknowledged labor market softening and tariff uncertainty.

With Fed futures now pricing an 80% probability of a rate cut in September, traders will be watching for confirmation in this week’s Fed commentary and inflation prints.

Economic Releases & Notable Earnings

Monday (8/4)

• Earnings: PLTR (est. $0.14 EPS, $936.2M rev), IDXX ($2.44), TSN ($0.87), WAT ($2.63), ON ($0.96), W ($0.47), BNTX (-$3.36)
• Data: Cleveland Fed Inflation Expectations (3.9%)

Tuesday (8/5)

• Earnings: CAT ($5.99), PFE ($0.60), MAR ($2.50), MPC ($4.12), TDG ($9.90), ZTS ($1.56), AMD ($0.69), ANET ($2.10), AMGN ($4.97)
• Data: 10:00 GMT – NFIB Small Business Index (98.6), 12:30 GMT – Core CPI m/m (0.2%), CPI m/m (0.3%), CPI y/y (2.7%), 18:00 GMT – Federal Budget Balance ($27.0B)

Wednesday (8/6)

• Earnings: DIS ($1.39), MCD ($2.97), WIX ($1.67), SHOP ($0.26), NYT ($0.45)
• Data: 14:30 GMT – Crude Oil Inventories

Thursday (8/7)

• Earnings: CEG ($1.68), CROX ($4.01), LLY ($3.92), DDOG ($0.43), AKAM ($1.58), BLOCK ($0.67), TTWO (-$1.52)
• Data: 12:30 GMT – Core PPI m/m (0.0%), PPI m/m (0.0%), Jobless Claims, 14:30 GMT – Natural Gas Storage

Friday (8/8)

• Earnings: ENB ($0.58), WEN ($0.27), OTEX ($0.98), AMR ($4.49)
• Data: 12:30 GMT – Core Retail Sales m/m (0.5%), Retail Sales m/m (0.6%), Empire Manufacturing (5.5), Import Prices (0.1%), 13:15 GMT – Capacity Utilization (77.6%), Industrial Production (0.3%), 14:00 GMT – UoM Consumer Sentiment (61.7), Inflation Expectations (4.5%), Business Inventories (0.0%), 20:00 GMT – TIC Long-Term Purchases ($259.4B)

Central Bank Activity

Fed Chair Powell, following last week’s decision to hold rates at 4.25%–4.50%, emphasized tariff impacts remain unclear and labor market softening could warrant support. Markets are now pricing an 80% chance of a September cut. Commentary this week will be key for confirming direction.

Technical Outlook

• Dow: Closed at 43,588.58 (-2.92%), pulling back sharply from resistance near 45,073.63. Key support lies near 41,981.14 with the 52-week SMA at 42,569.56.

• Nasdaq: Ended at 20,650.13 (-2.17%), below recent highs of 21,457.48. Initial support seen near 19,334.98, 52-week SMA at 18,766.01.

• S&P 500: Settled at 6,238.01 (-2.36%), off highs of 6,427.02. Watch 5,943.23 as support with 52-week SMA at 5,847.20.

Weekly structure remains constructive but vulnerable to further near-term pullbacks.

Outlook

Tariff fallout, labor data, and inflation releases will dominate the week. Investors will watch for signs of slowing goods consumption and whether disinflation in services continues. A soft CPI could firm market conviction for a September rate cut.

Strong tech earnings may help stabilize sentiment, especially if AI leaders maintain momentum. With over 80% of companies beating earnings and policy easing expectations rising, dips may continue to be bought—but headline risk remains elevated.

More Information in our Economic Calendar.