New Inflation Numbers and Earnings Kickoff: What Could Move the Stock Market in the Week Ahead

Between fresh inflation data and the start of earnings season, investors will have a lot to grapple with in the week ahead.

Market watchers will be searching for any insight into the Federal Reserve’s plans for interest rates at its meeting in early May. The central bank has been hiking rates for about a year in an effort to bring down inflation, which has also weighed on the price of financial assets, like stocks and bonds.

Whether it’s achieving that goal depends on who you ask. Job growth slowed in March, according to the U.S. Labor Department’s most recent report — a sign that the Fed’s interest rate increases may now be working as planned.

Here’s what experts will be watching the week of April 10:

New inflation data

Two popular inflationary indicators from the Labor Department are slated for Wednesday and Thursday.

The consumer price index (CPI) will show changes in the price of consumer goods and services in March (think everything from eggs to cars to rent), while the producer price index (PPI) will show changes in the price of goods and services that are paid to the U.S. producers.

The inflation numbers are likely to influence what the Fed does next. As it stands, Wall Street is split on whether interest rate hikes will continue.

“The Fed is not done with its tightening, and the market continues to underestimate how high and for how long interest rates will be elevated,” David Trainer, CEO of investment research firm New Constructs, said in written commentary shared with Money. “The Fed understands that the pain created by rising interest rates is much less than the alternative of stimulus and low interest rates, which lead to continued disconnects between price and value in the stock market.”

Fed meeting minutes

On Wednesday, the Fed will release minutes from its March Federal Open Market Committee meeting, during which the committee raised interest rates by 25 basis points.

Minutes are usually released about three weeks after the meetings and — while the initial decisions tend to make headlines and move markets — they can offer up details about the Fed’s overarching policy stance. They often shed light on the reasoning behind certain decisions, and they can hint at what the Fed plans to do next.

“Market watchers will focus on any language that may signal future Fed action, including no action,” says Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

Start of earnings season

And just like that, we’re already kicking off earnings season again. Over the next several weeks, companies will report on how they financially performed in the first quarter of the year (January 1 through March 31).

Earnings reports include information like revenue as well as company-specific data, like Netflix’s subscription growth and Apple’s iPhone sales. Several banks are expected to report on Friday.

All eyes will undoubtedly be on regional bank earnings and guidance from big bank CEOs, as Liz Young, head of investment strategy at SoFi, wrote in a recent earnings season preview. Financial markets are still dealing with the aftermath of a banking crisis that started with the collapse of Silicon Valley Bank.

As for earnings overall, Young said the hope is that profit margins — the measure of whether companies are actually making money — “don’t contract too much.”

“The story has been that profit margins are high enough to withstand a little pullback in revenue growth and increased costs from inflation — largely because consumers have thus far absorbed price increases,” she added.

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