The upcoming week is packed with significant economic data releases, corporate earnings reports, and Federal Reserve speeches, all of which could heavily influence market sentiment amidst ongoing U.S.-China trade tensions. Investors will be closely monitoring the Consumer Price Index (CPI) report on Tuesday for indications of easing price pressures, following March's unexpected drop to 2.4%. This data is critical as the Federal Reserve deliberates its interest rate policy.

Trade relations remain a focal point, with markets keenly observing meetings between U.S. and Chinese officials for signs of de-escalation. The outcomes of these discussions could set the market's tone early in the week. Several Federal Reserve officials, including Chair Jerome Powell, Vice Chair Philip Jefferson, Governors Christopher Waller and Michael Barr, and regional Fed presidents Mary Daly and Tom Barkin, are scheduled to speak. Powell's remarks on Thursday will be particularly scrutinized, especially after President Trump's recent criticism of the Fed’s interest rate policy.

Retail data and consumer sentiment will also be closely watched. April’s retail sales figures, due on Thursday, will offer insights into consumer spending habits, especially as shoppers may have been accelerating purchases ahead of new tariffs. Recent consumer sentiment surveys have indicated worsening feelings about the economy, making this report particularly significant. The preliminary May reading of the Michigan Consumer Sentiment Index, arriving on Friday, will provide further perspective, especially given concerns about the potential impact of tariffs on prices. Tuesday’s National Federation of Independent Business (NFIB) Small Business Optimism Index will provide additional insights into economic conditions. Housing market indicators, including the homebuilders’ confidence survey on Thursday and housing starts data on Friday, will highlight inventory supply trends during a period of housing scarcity and affordability challenges.

The earnings calendar is full of reports from major companies across various sectors. Walmart's quarterly report, due Thursday before market opens, will provide insights into the retail sector, particularly regarding the impact of tariffs on its business. Technology sector reports include Cisco Systems on Wednesday and Applied Materials on Thursday. Cisco's previous quarter saw higher revenue driven by increased AI orders, while Applied Materials previously warned of potential negative impacts on sales due to limitations on chip exports. Take-Two Interactive’s Thursday report is highly anticipated as the video game maker prepares for the latest Grand Theft Auto release. Deere & Co., an agricultural equipment manufacturer, will also report Thursday, offering a glimpse into the health of the agricultural sector. Chinese e-commerce companies like Alibaba, JD.com, and Tencent Music Entertainment will also report. Nuclear power startup Oklo, backed by OpenAI’s Sam Altman, will report Tuesday, with investors watching its potential to meet energy demand for AI infrastructure projects.

Last week, market indexes ended their winning streak, with the Dow Jones Industrial Average declining 0.16%, the S&P 500 falling 0.47%, and the Nasdaq-100 down 0.20% for the week. The S&P 500 ended its nine-day winning streak on Monday as investors took profits ahead of the Fed’s rate decision.

Analyst Trader Edge has pointed out bearish divergence on the E-Mini S&P 500, suggesting a possible weakening of the current bullish momentum and a potential pullback next week.

The Federal Reserve held rates steady at its meeting last week, citing increased macroeconomic uncertainty due to tariffs and signaling a continued “wait and see” approach. Powell’s statement that the economy remains in a “solid position” helped reassure investors and sparked a market rebound. Optimism grew on news of U.S.-U.K. trade agreement announcements. However, despite resumed dialogue with China, investors acknowledge that a swift resolution to trade tensions is unlikely. Thursday’s Producer Price Index will show inflation at the wholesale level, often foreshadowing the following month’s CPI. Import and export price data will be released Friday, adding to the inflation picture. Monday’s release of the monthly federal budget for April will provide an update on government debt levels.