Inflation, Jobs Data and Other Key Things to Watch this Week

Last week brought market volatility with tariff news causing whipsaw and before Fed Chief Jerome Powell calmed the markets somewhat on Friday.

The S&P 500 ($SPX) (SPY) remains sensitive to economic indicators as traders continue to reassess jobs data and monetary policy outlook.

Here are 5 things to watch this week in the Market.

Inflation Data Double-Header

This week delivers crucial inflation readings with Wednesday's Consumer Price Index (CPI) at 7:30 am, followed by Thursday's Producer Price Index (PPI) at 7:30 am. After recent mixed signals from the Fed about the timing of potential rate cuts, these inflation reports take on heightened importance. Any upside surprise in core inflation could further delay rate cut expectations and pressure equities, while cooler-than-expected readings might revive hopes for earlier monetary easing. With markets particularly sensitive to inflation surprises in recent months, these reports could create significant volatility across asset classes.

Labor Market Signals

Tuesday's JOLTS Job Openings report at 9 am will provide important insights into labor market dynamics. The ratio of job openings to unemployed workers has been a key metric the Fed watches for signs of cooling in the labor market. Any significant drop in openings could signal labor market easing and potentially influence rate cut timing. Thursday's Initial Jobless Claims at 7:30 am will offer additional perspective on employment trends. Together, these reports will help traders assess whether recent employment data represents the beginning of a sustained labor market softening or merely temporary fluctuations.

Tech Earnings Focus

Oracle (ORCL) kicks off the week's earnings on Monday, followed by Adobe (ADBE) on Wednesday. Both companies have made significant AI investments and their commentary on enterprise spending, AI initiatives, and forward guidance could impact broader tech sentiment. Adobe's results in particular will be watched for insights into creative professional and marketing technology demand. DocuSign (DOCU) reports Thursday, potentially offering additional perspective on business activity and digital transformation trends.

Housing Market Health

Lennar (LEN), one of the nation's largest homebuilders, reports earnings on Wednesday. With mortgage rates remaining elevated despite recent modest declines, the housing market faces ongoing affordability challenges. Lennar's results, order trends, and commentary on buyer demand will provide valuable insights into housing market resilience. Their perspective on material costs and labor availability could also offer further indications of broader inflation trends.

Consumer Spending Trends

Thursday brings earnings from Dollar General (DG), offering a window into consumer spending behavior, particularly among value-conscious shoppers. Given recent mixed retail results and concerns about consumer financial health, Dollar General's performance could provide important signals about discretionary spending and trading-down behavior. Their insights on consumer staples inflation and promotional activity will also help traders assess whether inflation pressures are easing at the consumer level, complementing the official CPI data released the previous day.

Best of luck this week and don't forget to check out my daily options article.