Last week's market was dominated by President Trump's tariff announcements. The S&P 500 ($SPX) (SPY) dropped 4.93% on Thursday and a further 5.85% on Friday and is now down 14% year-to-date.
Following this historic two-day market plunge triggered by Trump's unexpectedly high tariffs, U.S. stock futures plummeted further Sunday evening, signaling another potentially severe trading day ahead. As of Sunday evening, the Dow futures (YMM25) are down over 1,400 points (-3.7%) and S&P 500 (ESM25) and Nasdaq futures (NQM25) also shedding 4%, as the White House stood by its controversial tariff policy.
Wedbush analysts, led by Dan Ives, delivered a scathing critique of Trump's new tariffs, labeling them "economic Armageddon" for the tech sector, surpassing the dot-com crash and 2008 crisis in potential damage.
Here are 5 other things to watch this week in the Market:
CPI Inflation Report
Thursday's Consumer Price Index (CPI) at 8:30am represents this week's most consequential market event. Following recent hot inflation readings, this report will be scrutinized for signs of whether price pressures are moderating or becoming further entrenched. The market will focus not only on the headline figure but particularly on core inflation excluding food and energy. With the Fed continuing to emphasize data dependency for future rate decisions, an upside surprise could further delay rate cut expectations and pressure equity markets, while a cooler-than-expected reading might revive hopes for monetary easing later this year. Rate-sensitive sectors including technology, utilities, and real estate could see significant reactions based on this report.
FOMC Meeting Minutes
Wednesday's release of the Federal Open Market Committee (FOMC) minutes at 2pm will provide investors with deeper insights into the Fed's latest policy discussions. Markets will closely examine the minutes for clues about committee members' views on inflation persistence, labor market conditions, and the timing of potential rate cuts. With recent statements suggesting the Fed remains cautious about inflation risks, any indications of growing concern about price pressures could impact rate expectations. The minutes will be particularly important for contextualizing the Fed's thinking ahead of Thursday's CPI report, potentially creating a two-day period of heightened market sensitivity to monetary policy perspectives.
Producer Price Index
Friday's Producer Price Index (PPI) at 8:30am will offer additional perspective on inflation dynamics following Thursday's CPI release. As a measure of wholesale prices and pipeline inflation pressures, PPI data can provide early signals about future consumer price trends. The market will particularly focus on core producer prices for finished goods to assess whether cost pressures are moderating in the production chain. With ongoing concerns about the inflationary impact of tariffs and global supply chain disruptions, this report takes on additional importance. Industrial, materials, and consumer staples sectors could see notable reactions based on these results as investors evaluate potential margin pressures.
Treasury Auctions and Yield Curve
Wednesday's 10-year Treasury note auction at 1pm will be closely watched for signals about investor demand for U.S. government debt. Following recent yield volatility and growing concerns about deficit financing, auction results could influence broader fixed-income markets and equity valuations. The auction's bid-to-cover ratio and yield compared to expectations will provide insights into investor sentiment about inflation risks and economic growth prospects. Treasury market dynamics have ripple effects across asset classes, with financials, technology, and utilities sectors particularly sensitive to significant yield movements. The auction timing just before the FOMC minutes release creates potential for amplified market reactions.
Weekly Jobless Claims
Thursday's Initial Jobless Claims at 8:30am will offer timely insights into labor market conditions. Following last week's jobs report, these weekly figures will help investors assess whether any emerging weaknesses in employment are developing. Recent jobless claims have remained relatively low by historical standards, but any significant increase could fuel concerns about economic momentum. The coincidental timing with the CPI release creates the potential for these reports to either reinforce or offset each other in terms of market impact. Labor-intensive sectors and companies particularly sensitive to employment costs could see notable reactions based on this data, especially if it substantially deviates from expectations.
Best of luck this week and don't forget to check out my daily options article.
