Investors will be tuned in for the Consumer Price Index (CPI) inflation report to be released on Tuesday morning before the market opens.
Inflation has been moving steadily lower in recent months, with the CPI dropping to 2.4% in March, the lowest rate since last September. Economists are expecting inflation to fall to 2.3% in April with core inflation remaining at 2.8%.
The Federal Open Market Committee (FOMC) said last week that the risk of higher inflation was rising due to tariffs. In April, 10% tariffs on imports across the board kicked in, as well as 145% reciprocal tariffs on China (which were just lifted), so it will be interesting to see if they impacted inflation in April.
Also, this week, the Retail Sales report comes out on Thursday, and that could lend valuable insight into how consumers are feeling in a slowing economy.
In addition, the NFIB (National Federation of Independent Businesses) Optimism Index is released on Wednesday. That report should shed light on the confidence level of businesses.
Stocks Rise on Tariff Pause
A 90-day pause in the US-China trade war and a reduction of tariffs sent stocks flying Monday.
Stocks got off to a fast start this week, as markets soared Monday following the announcement of a 90-day tariff pause with China and a significant reduction in tariffs.
During the pause, tariffs on US tariffs on China were reduced to 30%, while Chinese tariffs on the US were dropped to 10%.
The Dow Jones Industrial Average was up about 1,050 points in mid-morning trading, or roughly 2.4%, while the S&P 500 jumped roughly 160 points, or 2.8%. The Nasdaq Composite skyrocketed about 660 points, or 3.6%, while the Russell 2000 popped 75 points or 3.7%.
Stocks will try to bounce back from losses last week, as the Dow dropped 0.2% last week, while the S&P 500 fell 0.5% and the Nasdaq Composite reversed 0.3%. Only the Russell 2000 index gained last week, improving 3 points to 2,203.
Walmart Highlights Earnings This Week
First quarter earnings season begins to slow down this week, with only a handful of major companies set to report. One of them is the world’s largest retailer, Walmart (NYSE:WMT). While about two-thirds of Walmart’s merchandise comes from the US, it does rely on Chinese imports, as roughly 60% of what it imports comes from China. So, a pause in the trade war with China should help.
When Walmart reports earnings Thursday morning, analysts are anticipating earnings of 58 cents per share and revenue of $164.5 billion.
Other notable earnings this week are sports betting stock Sportradar Group (NASDAQ:SRAD) on Monday, athletic apparel maker Under Armour (NYSE:UAA) on Tuesday, tech company Cisco Systems (NASDAQ:CSCO) on Wednesday, restaurant chain CAVA Group (NYSE:CAVA) on Thursday, and shoemaker Birkenstock (NYSE:BIRK) on Thursday.