What to Expect in the Week Ahead (ADBE, HD and ORCL Earnings; Inflation, the Fed)

Markets were relatively quiet with investors largely in wait-and-see mode ahead of next week's inflation data and Federal Reserve interest-rate decision. Major indexes posted modest gains and losses over the course of the week.

It's a big week on the economic data and policy fronts. Investors will contend with major inflation data and central bank meetings, plus other economic and earnings releases.

The Bureau of Labor Statistics will report the consumer price index for May on Tuesday, followed by the producer equivalent on Wednesday. The consensus estimates are for increases of 4.2% and 1.5%, respectively.

The Bureau of Labor Statistics releases the consumer price index for May. Consensus estimate is for the CPI to increase 4.2% year over year, while the core CPI, which excludes volatile food and energy prices, is seen rising 5.2%. This compares with gains of 4.9% and 5.5%, respectively, in April.

The National Federation of Independent Business releases its Small Business Optimism Index for May. Expectations are for an 89 reading, matching the April data. The index remains mired well below historical averages as small-business owners struggle to find qualified workers for open positions.

The Federal Open Market Committee announces its monetary-policy decision. Traders are pricing in a 26% chance that the FOMC will raise the federal-funds rate by a quarter of a percentage point to 5.25%-5.50%. Pause, skip, or hike has been the debate on Wall Street since the central bank’s last meeting in early May. The most likely outcome is for the FOMC to skip this meeting but hike interest rates by a quarter of a percentage point when it next meets in late July.

The BLS releases the producer price index for May. The PPI is expected to rise 1.5% year over year, nearly a full percentage point less than in April. The core PPI is seen increasing 2.9%, three-tenths of a percentage point less than previously. The PPI is currently at its lowest level since January of 2021.

The European Central Bank announces its monetary-policy decision. The ECB is widely expected to raise its key short-term interest rate by a quarter of a percentage point, from 3.25% to 3.5%. Traders expect at least one more rate hike after this coming meeting as inflation has proved to be more stubborn in the euro zone than stateside.

The Census Bureau reports retail sales data for May. The consensus call is for retail spending to remain flat month over month at $686 billion, following a 0.4% increase in April.

The University of Michigan releases its consumer sentiment index for June. Economists forecast a still-dour 60 reading, one point more than in May.