What to watch this week

The stock market is at record highs as investors brace for what's expected to be the busiest week of the summer on Wall Street.

The S&P 500 (^GSPC) notched a record close in each of the past five trading sessions, rising about 1.5% for the week. The tech-heavy Nasdaq Composite (^IXIC) rose about 1.3% and also closed out the week at record levels. Meanwhile, the Dow Jones Industrial Average (^DJI) added 1% on the week.

In the week ahead, a Federal Reserve meeting, the July jobs report, and earnings from Big Tech stalwarts Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Meta (META) will drive the direction of markets to kick off August.

A busy week of corporate earnings awaits, with 164 members of the S&P 500 expected to report quarterly results. Boeing (BA), Coinbase (COIN), Exxon Mobil (XOM), Chevron (CVX), and Starbucks (SBUX) will be among the companies highlighting the schedule.

Updates on job openings, activity in the services and manufacturing sectors, and consumer confidence are also on the calendar, while the first reading of Gross Domestic Product (GDP) for the second quarter is slated for Wednesday.

Investors will also be keyed in on trade-related updates, with Friday serving as President Trump's latest deadline to reach a flurry of deals.

Before Big Tech earnings and economic data take center stage, investors will be closely tracking the Federal Reserve's July monetary policy decision. While Federal Governor Christopher Waller has signaled he may vote to lower the fed funds rate at the July meeting, investors are betting an interest rate cut in the coming week is almost certainly not in the cards.

Markets are currently pricing in just a 3% chance the Fed cuts interest rates at its July meeting, per the CME FedWatch Tool. Looking out further, markets see a 64% chance the Fed will cut rates by at least a quarter of a percentage point by the end of its September meeting.

With no interest rate move expected in July, JPMorgan chief US economist Michael Feroli wrote in a note to clients that the focus this week will likely shift to any dissents among the Federal Open Market Committee's (FOMC) voting members.

“We wouldn’t take too much signal from two dissents, as we think it would say more about auditioning for the Fed chair appointment than about economic conditions,” Feroli wrote.

The week ahead will bring updates on economic growth in the second quarter, the Fed's preferred inflation gauge, and the labor market.

On Wednesday, the Bureau of Economic Analysis is slated to release the advance estimate for second quarter gross domestic product (GDP). Expectations are that the US economy rebounded in the second quarter, growing at an annualized rate of 3% in the quarter after activity contracted at 0.5% rate to start the year.

On Thursday, the latest reading of the Fed's preferred inflation gauge, “core” PCE, is expected to show inflation increased 0.3% over the prior month in June. This would mark an acceleration from the 0.2% increase seen in May.

On annual basis, economists surveyed by Bloomberg expect core PCE to clock in at 2.7%, unchanged from May.

On Friday, the Bureau of Labor Statistics will provide a fresh look at the national employment situation.

The July jobs report is expected to show 101,000 nonfarm payroll jobs were added to the US economy, with the unemployment rate inching higher to 4.2%, according to data from Bloomberg. In June, the US economy added 106,000 jobs, while the unemployment rate unexpectedly fell to 4.1%.

“We continue to anticipate that coming reports on the labor market, inflation and growth will evolve in a way that keeps Fed policy on hold through year end,” BNP Paribas senior US economist Andrew Husby wrote in a note to clients on Friday.

After about a third of the S&P 500 have reported their earnings, the index is pacing for earnings growth of 6.4%, up from the 5% expected on June 27, per FactSet data.

At the same time, estimates for year-over-year earnings growth in the final two quarters of 2025 and the full year 2026 have been moving higher. As of July 25, FactSet data showed analysts expect the S&P 500 to grow earnings by 13.9% in 2026, up from the 13.8% that had been expected a month ago.

This reflects that not only are companies topping Wall Street's estimated earnings growth in the prior quarter, as most typically do, but they are also maintaining constructive outlooks for the rest of the year.

Citi US equity strategist Scott Chronert pointed out in a Friday note to clients that this is helping support the recent rally in stocks. “The beat-and-hold versus a beat-and-lower, which has been common in recent quarters, has been good enough for the index to melt up to new highs,” Chronert wrote.

“The question from here is how much more good news do we need to sustain [these] levels.”

When Apple, Meta, Amazon, and Microsoft report, AI spending will be in particular focus for investors after Alphabet recently said its capital expenditures would climb another $10 billion to $85 billion in 2025.

As speculative trades have bubbled in recent weeks, highlighted by a soaring unprofitable tech trade and the return of meme stocks, whether or not markets are reaching a near-term top has once again become a pressing question for investors.

A recent research note from Goldman Sachs says not so fast.

Goldman's “speculative trading indicator” — which incorporates trading volumes in unprofitable stocks, penny stocks, and richly valued companies compared to their actual sales — has surged in recent weeks and is now only below levels seen during the dot-com bubble and the 2021 SPAC craze.

Goldman Sachs senior equity strategist Ben Snider pointed out surges like this have “signaled above-average near-term equity returns but a poor medium-term outlook for stocks.”

Economic data: Dallas Fed manufacturing activity, July (-12.7 prior)

Earnings: Tilray (TLRY), Waste Management (WM), Whirlpool (WHR)

Economic data: S&P CoreLogic 20-city home price index, year-over-year, May (+3.42% prior); Conference Board consumer confidence, July (95.9 expected, 93 prior); Job Openings and Labor Turnover Survey, June (7.77 million prior); Dallas Fed services activity, July (-4.4 prior)

Earnings: Boeing (BA), Booking Holdings (BKNG), Caesars (CZR), Cheesecake Factory (CAKE), Merck (MRK), PayPal (PYPL), Procter & Gamble (PG), Spotify (SPOT), Starbucks (SBUX), SoFi (SOFI), UnitedHealth Group (UNH), UPS (UPS), Visa (V)

Economic data: Federal Reserve monetary policy decision (no interest rate change expected); GDP annualized quarter-over-quarter annualized, second quarter advanced estimate (+2.5% expected, -0.5% prior); ADP private payrolls, July (+75,000 expected, -33,000 prior); Core PCE price index quarter-over-quarter, second quarter (+3.5% expected); Pending home sales month-over-month, June (0% expected, +1.8% prior); MBA Mortgage Applications, week ended July 25 (+0.8% prior); Minnesota Chicago PMI, July (44.0 expected, 47.4 prior)

Earnings: Meta (META), Microsoft (MSFT), Arm (ARM), Altria (MO), Carvana (CVNA), Ford (F), Generac (GNRC), Harley Davidson (HOG), Hershey (HSY), Humana (HUM), The Kraft Heinz Company (KHC), Qualcomm (QCOM), Robinhood (HOOD)

Economic data: Challenger jobs cuts, year-over-year, July, (-1.6% prior); Personal income, June (+0.2% expected, -0.4% prior); Personal spending, June (+0.4% expected, -0.1% prior); Core PCE price index, month-over-month, June (+0.3% expected, +0.1% prior); Core PCE price index, year-over-year, June (+2.7% expected, +2.7% prior); Employment cost index, second quarter (+0.8% expected, +0.9% prior); Initial jobless claims, week ending July 26 (223,000 expected, 217,000 prior)

Earnings: Apple (AAPL), Amazon (AMZN), Bristol Myers Squibb (BMY), Cigna (CI), Coinbase (COIN), CVS Health (CVS), Mastercard (MA), Norwegian Cruise Line (NCLH), Reddit (RDDT), Roblox (RBLX), Roku (ROKU), Strategy (MSTR)

Economic calendar: Nonfarm payrolls, July (+109,000 expected, +147,000 prior); Unemployment rate, July (4.2% expected, 4.1% prior); Average hourly earnings, month-over-month, July (+0.3% expected, +0.2% prior); Average hourly earnings, year-over-year, July (+3.8% expected, +3.7% prior); Average weekly hours worked, July (34.3 expected, 34.2 prior); Labor force participation rate, July (62.3% expected, 62.3% prior); ISM manufacturing, July (49.5 expected, 49 prior); S&P Global US manufacturing, July final (49.5 expected, 49 prior); Construction spending, month-over-month, June (+0.1% expected, -0.3% prior); University of Michigan consumer sentiment, July final (61.8 prior)

Earnings: Chevron (CVX), Colgate-Palmolive (CL), Exxon Mobil (XOM)

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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