Fed decision, jobs report will step out into spotlight

It's rare that folks think about a week of economic reports as potentially dramatic.

This week, however, has the potential to be very dramatic. There's just so much data and, yes, politics, about to be loosed on markets, on businesses and around the world.

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There's the July unemployment report, due Friday. The widely studied and analyzed PCE inflation report inflation report, due Thursday. There's the first round of estimates of second-quarter gross domestic product, the report card on how the economy is faring.

Parallel to the economic data are some 843 earnings reports due this coming week from the likes of Microsoft (MSFT) , Facebook-parent Meta Platforms (META) , Apple (AAPL) and Amazon.com (AMZN) .

It all comes in the context of continued negotiations on trade deals with tariff rates coming in at lower rates than President Trump suggested in April.

Trump said Sunday the European Union has agreed to a deal that envisions tariffs on European goods at 15%. The United States is still negotiating on tariffs with China, Canada and others.

So far, stock investors are happy to get a settlement. Stock index futures were signaling stocks will open higher on Monday.

Gains would come after the Standard & Poor's 500, Nasdaq Composite and Nasdaq-100 indexes all hit record highs last week.

The Fed meeting: the week's key event

And, of course, there's the Federal Reserve meeting on Tuesday and Wednesday. Will the central bank cut its key federal funds rate, not at 4.25% to 4.5%?

Donald Trump wants a rate cut badly now. Treasury Scott Bessent says he wants it. Howard Lutnick, the Commerce Secretary, says he wants it. Two Fed governors, Christopher Waller and Michelle Bowman, are for it.

But the other 10 voting members of the Federal Open Market Committee, including Fed Chairman Jerome Powell, have said they're content to wait, probably until the Fed's Sept. 16-17 meeting.

Powell attracts most of President Trump's ire; he's threatened to fire Powell, whose term expires next May. (Whether he legally can fire Powell is not clear.)

Powell remains worried the president's big beautiful tax bill and his tariffs will affect inflation.

Powell is not opposed to cutting later and, in fact, the futures markets think the Fed will decide to wait until September. A second rate cut will come in October or December.

Overnight trading in the 10-year Treasury note shows the yield rising to 4.41% from Friday's 4.392%.

The other big events

The July jobs report, due Friday at 8:30 a.m.

There are estimates showing jobs growth falling to around 110,00 from 147,000 in June with the unemployment rate holding at 4.1% or so.

But this bit of data has become quite volatile and a bit suspect because it's getting harder to obtain reliable data from phone and online surveys.

Recruiters and job seekers who were laid off by the federal government during a June job fair in Chicago.

Bloomberg/Getty Images

Another indicator should come Thursday when outplacement firm Challenger, Gray & Christmas should release its monthly tally of reported layoffs and job cuts.

One more jobs indicator: the weekly report on initial jobless claims, due Thursday. The most recent report showed 217,000 layoffs, down 4,000 from a week earlier.

More Tech Stocks:

PCE inflation, due Thursday morning

The Personal Consumption Expenditures Index measures what is happening to prices for services and products consumers actually buy. It was 2.3% year-over-year in June and may be up slightly in July.

Housing prices

Two reports will look at this question: the S&P Case-Shiller report that looks at home prices on Tuesday and the National Association of Realtors Pending Home Sales Index on Wednesday.

The Case-Shiller report has suggested home prices are moderating.

The pending sales report was up slightly in June but is down around 40% from levels last seen in 2022. Part of the downturn is due to:

Higher interest rates.
Higher home prices.
Too little construction of homes aimed at first-time home buyers.

Consumer confidence

The Conference Board releases its Consumer Confidence Index report for July at 10 a.m. Tuesday. The University of Michigan releases its Consumer Sentiment Index at 10 a.m. Friday.

Both look at how consumers are looking at inflation, the economy and other factors. The June reports showed increasing confidence, a reflection of better conditions in financial markets and the economy.