Will Inflation and Earnings Ease Investors' Concerns? Busy Week on Tap for Stocks

The stock market is taking a breather on Monday, mirroring a pullback in Treasury bond yields. Investors are gearing up for a busy week on Wall Street, packed with events that could shake things up after a strong July start.

Last week was a celebration on Wall Street, with the S&P 500 and Nasdaq reaching record highs once again. Big tech stocks were the stars, thanks to a dip in Treasury yields triggered by a mixed jobs report for June.

The report showed the U.S. added 206,000 new jobs last month, which sounds good at first glance. But hold on a sec! That number is actually 111,000 lower than what experts predicted, hinting at a slowdown in job growth.

Here's another number to chew on: wage growth hit a three-year low of 3.9%. Plus, the unemployment rate nudged up slightly to 4.1%. This data sets the stage for an intriguing week ahead.

Investors are betting that the Federal Reserve will see inflation simmer down and the economy cool off, leading to the long-awaited first rate cut in September. We might get some hints from Fed Chair Jerome Powell himself! He's scheduled to deliver his semi-annual testimony to Congress this Tuesday, so get ready for some market-moving insights.

Speaking of moving the market, the Commerce Department will unveil its estimate for June inflation on Thursday. Analysts are expecting a slight drop to an annual rate of 3.1%.

This week also sees the Treasury conduct record-sized auctions of 10-year and 30-year bonds. Buckle up and watch how much foreign investment these auctions attract! As of Monday morning, benchmark 10-year Treasury note yields were hovering around 4.314%, with 2-year notes trading at 4.637%.

But wait, there's more! This week also marks the kick-off of the second-quarter earnings season. Big names like PepsiCo, JPMorgan Chase, Wells Fargo, and Citigroup are all stepping up to the plate on Thursday and Friday to share their financial results. Analysts predict a collective profit increase of 10.6% for the S&P 500 compared to last year, with tech and communication services leading the pack.

The markets haven't even opened yet, but there's already some pre-game action! Boeing is up 0.5% after reaching a deal with the U.S. Department of Justice. They'll plead guilty to fraud and conspiracy charges related to the deadly 737 MAX crashes in 2018 and 2019, and pay a hefty $243.6 million fine.

Meanwhile, overseas markets are showing some early gains. France's CAC-40 and the broader Stoxx 600 benchmark are both up 0.4% following Sunday's parliamentary elections. The results prevented a far-right party from taking power, but also leave President Macron needing to build a coalition government – a political juggling act to watch!

In Asia, Japan's Nikkei 225 closed slightly lower as the yen strengthened against the U.S. dollar. So, will inflation ease investor worries? Will earnings impress? Buckle up for a wild week on Wall Street!