Stocks struggled to gain steam last week as uncertainty around President Trump’s tariff plans continued to loom over markets.
The S&P 500 (^GSPC) popped about 0.5% while the Dow Jones Industrial (^DJI) rose more than 1%. The tech-heavy Nasdaq Composite (^IXIC) added nearly 0.2%.
In the week ahead, a reading of the Fed’s preferred inflation gauge will highlight the economic releases. Updates on activity in the manufacturing and services sectors, consumer confidence, and the final reading of fourth quarter economic growth are also expected.
On the corporate front, quarterly results from Dollar Tree (DLTR), Lululemon (LULU), and KB Home (KBH) will headline a subdued slate of scheduled financial updates.
The Federal Reserve held interest rates steady last week while updating its economic forecast to project higher inflation and slower economic growth than previously thought. The median forecast from Fed officials signals two interest rate cuts in 2025, in line with what markets expected headed into the meeting.
Federal Reserve Chair Jerome Powell admitted tariffs have added increased uncertainty to the outlook. He added that the most likely outcome is that higher inflation in 2025 will be a “transitory” impact from tariffs.
“I think that’s kind of the base case,” Powell said. “But as I said, we really can’t know that. We’re going to have to see how things actually work out.”
Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments
Wall Street economists and investment strategists largely took the meeting to mean the Fed, like the rest of markets, is in wait-and-see mode in anticipation of Trump’s tariff plans.
“When the path forward is so unclear, you kind of just take it with a grain of salt,” Ross Mayfield, Baird Private Wealth Management investment strategist, told Yahoo Finance. “Go back to [the] basics and focus on the drivers of either the individual equities or the sectors in the market that you own.”
While markets are patiently waiting for clarity on when, or if, tariffs could impact inflation, investors will get a look at price increases for the month of February.
Economists expect more signs of stalling inflation in the Personal Consumption Expenditures (PCE) release due Wednesday. Economists expect annual “core” PCE — which excludes the volatile categories of food and energy — to have clocked in at 2.7% in February, up from the 2.6% seen in January. Over the prior month, economists project “core” PCE at 0.3%, unchanged from January.
