CPI Report Wednesday Tests a Market Sitting at Record Highs

Wall Street heads into the week of August 10 perched at record levels, with the S&P 500 closing Friday at an all-time high of 7,757.64 and the Nasdaq climbing 1.3% to 26,690.62. The rally was fueled by a surprise July jobs report showing employers cut 23,000 positions, which boosted bets on a Federal Reserve rate cut in September.

The next test comes Wednesday, when the July Consumer Price Index lands at 8:30 a.m. Consensus expects headline inflation to ease to 3.4% year over year, with core inflation edging down to 2.5%. A hotter print could revive rate-hike odds ahead of the September FOMC meeting and pressure stocks trading at stretched valuations.

Producer prices follow Thursday and retail sales close the week Friday. On the earnings front, the second-quarter season slows, with Super Micro Computer, CoreWeave and JD.com among the remaining highlights.