Following last week's dramatic market moves driven by escalating trade tensions and NVIDIA's earnings results, this week shifts focus to a comprehensive assessment of U.S. economic health through a packed calendar of labor market and business activity indicators. The S&P 500 ($SPX) (SPY) faces a critical test as investors evaluate whether underlying economic fundamentals remain strong enough to support current valuations amid ongoing geopolitical uncertainties and Fed policy considerations.

Here are 5 things to watch this week in the Market.

Fed Chair Powell's Economic Assessment

Monday's speech by Fed Chair Jerome Powell at 1pm comes at a critical juncture as markets digest recent trade policy escalations and await comprehensive labor market data later in the week. Powell's commentary will be closely analyzed for any evolution in the Fed's thinking about economic resilience, inflation persistence, and monetary policy direction. The timing, following the morning's manufacturing data releases, creates potential for Powell to address specific economic indicators in real-time. With recent trade tensions raising questions about economic stability and inflation risks, his remarks could significantly influence interest rate expectations and subsequently impact rate-sensitive sectors including technology, utilities, and financials. Any hints about the Fed's assessment of tariff-related economic impacts could prove particularly market-moving.

Late Earnings Insights

Tuesday and Wednesday bring earnings from several important retail companies, offering valuable perspective on consumer spending patterns amid ongoing economic uncertainties. Dollar General (DG) and CrowdStrike (CRWD) report Tuesday, followed by Dollar Tree (DLTR) on Wednesday. These discount retailers will provide insights into consumer behavior across different income segments, particularly important as trade tensions could impact product prices and purchasing power. Thursday features high-profile reports from Broadcom (AVGO), Lululemon (LULU), and DocuSign (DOCU), representing semiconductor, athletic apparel, and digital services sectors respectively. Management commentary on consumer demand, supply chain conditions, and forward guidance will be scrutinized for signs of resilience or emerging weakness in spending patterns.

Manufacturing vs. Services Health Check

Monday and Wednesday bring comprehensive readings on business activity across both manufacturing and services sectors, providing crucial insights into economic momentum. Monday's Manufacturing PMI at 9:45am followed by ISM Manufacturing PMI and Prices at 10am will reveal whether industrial activity continues to stabilize or faces renewed headwinds from recent trade policy developments. Wednesday's Services PMI at 9:45am and ISM Non-Manufacturing PMI and Prices at 10am will assess the health of the economy's largest sector. The pricing components of both reports will be particularly scrutinized for inflation signals that could influence Fed policy expectations. With manufacturing having shown signs of improvement in recent months while services have maintained expansion, any significant divergence or convergence between these sectors could trigger notable market rotations between cyclical and defensive positioning.

Labor Market Trilogy

This week delivers a comprehensive three-part assessment of employment conditions, starting with Tuesday's JOLTS Job Openings data, followed by Wednesday's ADP Employment report, and culminating in Friday's official Nonfarm Payrolls release at 8:30am. This progression will provide escalating insights into labor market health, from job availability through private sector hiring to comprehensive employment statistics including the unemployment rate and average hourly earnings. Friday's jobs report represents the week's most consequential economic release, with the potential to significantly influence Fed policy expectations and broad market sentiment. The Average Hourly Earnings component will be particularly important for assessing wage inflation pressures. With full employment remaining a key Fed objective alongside price stability, any meaningful deviation from expected employment trends could trigger substantial moves across interest rate-sensitive market segments.

Energy Market Dynamics and Economic Signals

Wednesday's Crude Oil Inventories report at 10:30am provides important context for energy markets amid ongoing geopolitical developments and approaching summer driving season. Oil prices often serve as both economic indicators and inflation inputs, making this data particularly relevant as markets assess growth prospects and Fed policy implications. Energy sector performance has shown relative strength during recent market volatility, and inventory levels could influence whether this outperformance continues. The report's timing coincides with multiple economic releases throughout the week, creating potential for energy price movements to either reinforce or contradict broader economic signals. Additionally, Thursday's Initial Jobless Claims at 8:30am will provide the week's final piece of employment-related data before Friday's comprehensive jobs report, offering a last-minute gauge of labor market conditions that could set expectations for the payrolls release.

Best of luck this week and don't forget to check out my daily options article.