Investing.com -- Stocks were weakening heading into the closing bell on Thursday despite the July report on consumer prices that showed inflation was cooling faster than expected.
The better than expected CPI report stoked hopes that the Federal Reserve won't raise interest rates when it next meets on policy in September, a pause the futures markets have already been anticipating. But investors may have more hope now that the Fed is at the end of its rate hikes, and could soon turn to rate cuts next year if the data continue to show prices cooling.
Friday brings another form of inflation reading in the form of the producer price index, adding more fodder for Fed policy makers.
New jobless claims for last week came in slightly higher than expected, a sign that the tight labor market may be loosening up a bit, and that could also add to cooling inflation.
While Fed officials don't meet on rate policy until next month, they will be converging at their annual Jackson Hole, Wyo., conference later this month, when officials could offer more insights into policy heading into the final months of the year.
Retail earnings next week could also set the tone for how consumers are behaving heading into the critical holiday shopping season.
Here are three things that could affect markets tomorrow:
1. Producer prices
The PPI report for July is expected out at 8:30 ET (12:30 GMT). Analysts expect it to climb 0.7% from last year and 0.2% for the month, while the core PPI is expected to climb 2.3% annually and 0.2% for the month.
2. Michigan consumer sentiment
The University of Michigan is releasing its latest consumer sentiment reading at 10:00 ET. Analysts expect it to read 71, down slightly from 71.6 in the prior reading.
3. Spectrum Brands
Household product maker Spectrum Brands Holdings Inc (NYSE:SPB) is expected to report earnings of 48 cents on revenue of $785 million.