An eventful coming week of economic data, corporate earnings reports and Middle East developments will test a resilient U.S. stock market that has indexes around record highs despite turbulence beneath the surface. The S&P 500 posted a second straight weekly gain, putting the benchmark index up more than 10% for the year and less than 1% from its record close from early June. The weekly strength overcame big swings in market-leading semiconductor shares and a flare-up in tensions between the U.S. and Iran that put risks tied to the four-month-old war and related energy price spikes back at the forefront for investors. Major banks next week kick off a second-quarter earnings season for U.S. companies that is expected to be strong. Several key economic reports are due, led by the U.S. consumer price index, an inflation gauge that could recalibrate market expectations for interest rates.
"You've got a number of crosscurrents from geopolitical headlines, the start of earnings season, some CPI data on the horizon and some skepticism around the AI trade," said Michael Reynolds, vice president of investment strategy at Glenmede. "It just seems like a lot of factors coming to a head all at once."
