Last week, the S&P 500 logged a 3.9% weekly gain after encouraging inflation reports and strong macro data boosted bets for a September interest-rate cut and helped ease recession concerns.
This was the first weekly gain following four consecutive weekly declines.
All sectors closed higher for the week, led by technology’s 7.5% jump and consumer discretionary’s 5.2% gain.
The pace of consumer inflation unexpectedly slowed last month, posting the smallest increase since March 2021, while producer prices grew less than Wall Street’s projections.
Markets are now pricing in a roughly 75% probability that the Federal Reserve will cut interest rates by 25 basis points next month, up from 49% a week ago, according to the CME FedWatch tool. The remaining odds are in the favor of a more aggressive 50-basis-point reduction.
Other key economic data released during the week showed that retail sales rose more than projected in July, while weekly applications for unemployment insurance unexpectedly fell, helping ease concerns regarding an economic downturn.
This week’s major earnings include Intuit, TJX, Target, and Lowe’s, among others.
Minutes from the Federal Open Market Committee’s July meeting are scheduled to be released Wednesday, with data on new and existing home sales for last month also on the deck for this week.
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