Market Highlights for the Week: Inflation, Earnings, ECB

This week will feature five key economic events that investors and analysts will be watching closely. From inflation reports to monetary policy decisions, these events could significantly impact financial markets.

U.S. Inflation

The main event will be the August consumer price index (CPI) report, which will be released on Wednesday. Economists estimate a year-over-year increase of 2.6%. The Federal Reserve’s inflation target is around 2%, so this data will be crucial in determining whether to cut interest rates at its next meeting in September.

This report will be the last major economic indicator before the Federal Open Market Committee (FOMC) meeting, which could influence the decision to opt for a quarter or half percentage point cut in the federal funds rate.

European Central Bank Monetary Policy Decision

On Thursday, the European Central Bank (ECB) will announce its monetary policy decision. Markets anticipate that the ECB will cut its policy rate by a quarter of a percentage point, leaving it at 3.5%. This cut is due to the slowdown in GDP growth in the Eurozone, prompting the ECB to take stronger measures to stimulate the economy.

This will be the ECB’s second rate cut this year, following the start of its rate-cutting cycle in June. The ECB’s actions could affect European and global financial markets as investors adjust their portfolios in line with interest rate movements.

Oracle and GameStop Results

Earnings reports will also play a crucial role this week. Oracle will release its fiscal first quarter 2025 results on Monday. Investors will be watching how the company handles competition in the cloud sector and how it has been affected by the growth of its infrastructure-as-a-service offering. GameStop, meanwhile, will release its financial results on Tuesday. 

With its shares up 6.83% the previous week, analysts are confident that the company will continue to show signs of recovery from its period of financial turmoil. Both Oracle and GameStop will have a major impact on the performance of their respective stocks and the technology and video game sectors.

U.S. Producer Price Index (PPI) Report

On Thursday, the U.S. Bureau of Labor Statistics will release the Producer Price Index (PPI) for August. The PPI is expected to increase by 1.7% year-over-year, while the core PPI, which excludes food and energy prices, is expected to rise by 2.4%. These figures will be critical in assessing inflationary pressure in the economy from the production side and could influence the Federal Reserve’s monetary policy.

University of Michigan Consumer Confidence Index 

On Friday, the University of Michigan will release its September consumer confidence index. The reading is expected to be 68, similar to August.

Inflation expectations for the year ahead, which settled at 2.8% in August, will also be closely watched, as these figures reflect consumers’ expectations for the economy’s direction. This index is seen as a key barometer of overall U.S. consumer economic sentiment and could affect household spending decisions and, consequently, the country’s economic growth.