Fresh US services data, Fed expectations, and AI-driven chip stocks could shape market direction this week.
After a holiday-shortened trading week, investors are heading into a quieter calendar, but several important economic reports could still move markets. The focus now turns to US services data, changing expectations for Federal Reserve policy, and whether AI-related chip stocks can keep their strong momentum.
Key Details
Monday's S&P Global and ISM services reports will provide the latest snapshot of the US economy after June's weaker-than-expected jobs report. The US added 57,000 jobs last month, while May's figure was revised down to 129,000 from 172,000, and April's total was lowered to 148,000 from 179,000.
The softer labor data slightly reduced expectations for another Federal Reserve rate hike this year. CME data shows traders now see about a 75% chance of rates ending the year higher, down from 84% a day earlier.
Investors will also watch earnings from PepsiCo on Thursday for signs of consumer spending and Delta Air Lines on Friday for insight into the impact of the Iran war and higher energy costs.
Market Reaction
US stocks ended last week mixed. The S&P 500 finished flat, the Nasdaq slipped 0.8%, while the Dow Jones gained 1.1%.
Meanwhile, AI hardware remains one of the market's strongest themes. Micron has surged 308% this year, Intel is up 280%, AMD has gained 173%, and the Philadelphia Semiconductor Index has climbed roughly 75% since January.
Why It Matters
For traders, this week's economic calendar and earnings reports could reshape expectations for interest rates and provide fresh clues about the strength of the US economy. At the same time, the AI investment story continues to favor semiconductor companies over much of the broader technology sector.
Markets will closely monitor US services data, the latest Fed signals, and corporate earnings for direction. Investors will also be watching whether the AI hardware rally can extend its impressive run through the second half of the year.
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Source: Yahoo Finance
Time: 4:30 PM EEST
