Investing.com -- Stocks surged on Tuesday after a cooler than expected inflation report for October stoked investor hopes that the Federal Reserve will be done with its interest rate increases.
Top-line inflation came in at a slower pace than September's readings, more evidence that inflationary pressures are cooling. Later this week, producer prices and retail sales readings could help confirm that trend or muddy the water.
Futures traders now see a nearly 100% probability that the Fed won't raise rates when it meets again next month, even though officials have recently left the door open to another increase if conditions required it.
Investors have turned their attention to when the Fed might start cutting rates. Futures markets put a tiny possibility of that happening in January but a greater possibility at the Fed's March meeting, though still just a 30% probability.
Earnings reports from major retailers this week could help set the tone for markets heading into Thanksgiving week and the retail sector's crucial holiday sales season.
Here are three things that could affect markets tomorrow:
1. Target earnings
The retailing giant Target Corporation (NYSE:TGT) is expected to report earnings per share of $1.47 on revenue of $25.3 billion.
2. Cisco reports
Tech firm Cisco Systems Inc (NASDAQ:CSCO) is expected to report earnings of $1.03 a share on revenue of $14.6 billion.
3. Retail sales
Data on retail sales for October are due out at 08:30 ET (13:30 GMT). Analysts expect a drop of 0.1% from the month before, when retail sales rose 0.7%.