Nasdaq Composite, S&P 500 outlook: top news for the week

• July CPI expected to show headline inflation at 3.4% (down from 3.5%) and core inflation at 2.5% (down from 2.6%), with lower-than-expected readings likely bullish for equities as Fed rate hike odds diminish
• Corporate earnings season shows blended growth of 50%, driven primarily by technology companies, with key reports due from Applied Materials, Cisco, and Ross Stores
• US-Iran crisis at gridlock as Iran demands sanctions relief and military withdrawal to reopen Strait of Hormuz; a deal would be bullish for stocks and impact oil markets

Market Summary: S&P 500 and Nasdaq Outlook

Market Performance:

The S&P 500 and Nasdaq Composite extended their rally last week, with the Nasdaq reaching 26,690 (highest since June 16) and the S&P 500 hitting a record 7,794 points. The rally was fueled by strong earnings and weaker-than-expected nonfarm payrolls data.

Key Catalysts This Week:

*Consumer Price Index (CPI) Report (Wednesday):*

• Headline CPI expected to rise 0.1% month-over-month in July (previous: -0.4%)
• Annual inflation forecast at 3.4% (down from 3.5%)
• Core CPI projected to decline from 2.6% to 2.5%
• Lower inflation would reduce Fed rate hike probability, supporting equity markets

*Bond Market Reaction:*

• 10-year Treasury yield fell from 4.75% to 4.69%
• 2-year yield dropped to 4.2% from 4.37%
• Fed rate hike odds diminishing

Corporate Earnings:

Earnings season shows robust 50% blended growth, primarily driven by technology companies including SanDisk, Western Digital, and Microsoft. Key upcoming reports include Applied Materials, CoreWeave, Simon Property Group, Cardinal Health, Cisco, and Ross Stores.

Geopolitical Developments:

The US-Iran Strait of Hormuz crisis is at a potential turning point. Iran demands sanctions relief, blockade removal, and US military withdrawal for reopening the strait. A resolution would be bullish for equities but continues supporting oil prices (crude futures rising on Hyperliquid).

Market Implications:

Cooling inflation, falling bond yields, strong tech earnings, and potential geopolitical de-escalation create a favorable environment for continued equity gains, particularly in technology-heavy indices.