Based on initial unemployment claims which have been flatlining, there is little to suggest employment remains at risk at this point in time. JOLTS, ADP and Non-Farm payrolls on Tues/Wed/Fri are all expected to show some moderation vs. April figures but still firmly in expansionary territory.
Trump comments last week suggested talks were going nowhere, sending the market lower on thin pre-holiday weekend trading. NVDA earnings are Wed and will likely set the tone for the tech sector and market in general. Investors are expecting a messy print as $5B of inventory that was to be sold to China will be written off after new restrictions were implemented.
Moody's US credit downgrade may turn out to be the big news of the week, although Treasury Secretary Bessent calling it a "lagged" indicator. 20-year bond auction on Wednesday will be closely watched for any impact of reduced demand/higher yields.
Busy week of economic news with inflation prints for both CPI and PPI as well as retail sales and industrial production. CPI inflation prints are expected to remain in the mid 2% level for both headline and core with Fed Chair Powell last week suggesting that tariffs should raise inflation but that it may be too early to see it in this months data.
Major equity indices will attempt to move higher for a 3rd straight week as encouraging trade/tariff talks continue with China potentially now coming to the negotiating table. ISM Services PMI is out today at 10am, with expectations for a slight decline to 50.3 from March's 50.8 reading, still in expansionary territory.
The potential for tariff agreements and Trump backing off his statement to fire Fed Chair Powell helped US equity markets to advance. The technology sector led all gainers, up 8%, while Consumer Cyclicals were a close second with a 6.6% gain.