Markets were pointing toward another rally on Sunday evening as investors brace for fresh economic data that will deliver new clues on how much President Donald Trump’s tariffs are impacting inflation.
Stocks closed the prior week on a positive note, with the Nasdaq hitting a new closing high and the S&P 500 nearing a return to its record.
Futures tied to the Dow Jones Industrial Average rose 68 points, or 0.15%. S&P 500 futures were up 0.13%, and Nasdaq futures added 0.09%.
The yield on the 10-year Treasury was flat at 4.285% after plunging last week on greater expectations for Fed rate cuts. The U.S. dollar was down 0.02% against the euro and up 0.02% against the yen.
Gold fell 0.93% to $3,458.90 per ounce, with markets waiting for clarification from the Trump administration on how Swiss gold will be tariffed. U.S. oil prices dropped 0.39% to $63.63 per barrel, and Brent crude fell 0.32% to $66.38.
So far, Trump’s tariffs haven’t produced a spike in inflation, which has been coming in below forecasts for months. But businesses have drawn down stockpiles that were built up before the import taxes went into effect, meaning new inventory has been costlier.
Earnings reports for the second quarter have indicated that some companies are absorbing a significant amount of the added costs instead of passing them onto to consumers, who have shown sign of pressure as the economy and hiring slow.
Meanwhile, the Federal Reserve has held off on rate cuts while it waits to see how much tariffs are impacting inflation—and if they are tilting consumers’ longer-term views on inflation.
The consumer price index for July will come out on Tuesday, and Wall Street expects a 0.2% monthly overall increase and a 0.3% uptick in the core CPI.
On a year-over-year basis, prices are expected to accelerate to 2.8% growth from 2.7% in June in the headline rate and heat up to 3.1% growth from 2.9% in the core rate.
The producer price index follows on Thursday, and analysts see a 0.2% monthly increase in the headline PPI and a 0.3% bump in the core PPI.
Meanwhile, several Fed officials are scheduled to speak throughout the week. That’s as the central bank is getting another dovish vote with the appointment of Stephen Miran as governor.
Despite the White House’s attacks on the Fed, Trump’s demands for it to lower rates, and the recent firing of the head of the Bureau of Labor Statistics, Wall Street remains upbeat on stocks.
Morgan Stanley’s Mike Wilson said last week a new bull market has started after previously forecasting that the S&P 500 could reach 7,200 by mid-2026.
Wilson’s view is part of an increased sense of optimism among other top analysts as fears over tariffs ease with the signing of several trade deals.
Last month, Oppenheimer chief investment strategist John Stoltzfus hiked his S&P 500 price target for this year to 7,100 from 5,950, reinstating the outlook he initially made in December 2024.
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