Stock Market Today: Markets Set Fresh Highs as CPI, Earnings Loom

Stocks set fresh highs as market participants awaited a key update on inflation, commentary from Federal Reserve Chair Jerome Powell and the start of second-quarter earnings season later this week – but lost momentum as the session wore on.

Two of the three main benchmarks managed to finish the session at fresh highs, however. By the closing bell, the broader S&P 500 added 0.1% to 5,572, while the tech-heavy Nasdaq Composite rose 0.3% to 18,403. The blue-chip Dow Jones Industrial Average, however, slipped 0.08% to end at 39,344.

Traders and investors, coming back from a holiday weekend, may be forgiven if they had their minds on other things. After all, the economic calendar and earnings calendar are full. 

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By the closing bell, stocks were mixed. The broader S&P 500 added 0.1% to 5,572, while the tech-heavy Nasdaq rose 0.3% to 18,403. The blue-chip Dow Jones Industrial Average, however, slipped 0.08% to end at 39,344.

Econ data, earnings on tap

Fed Chief Powell will deliver his semiannual testimony on Capitol Hill tomorrow, visiting the Senate on Tuesday and then appearing before the House on Wednesday. The Fed chair will face questions about the central bank's timeline for interest rate cuts, inflation and the rising unemployment rate seen in the June Jobs report.

Almost as if on cue, on Thursday all eyes will be on the next CPI report. Markets desperately want the Fed to enact its first quarter-point cut to the short-term federal funds rate sooner rather than later. A string of sticky inflation readings has complicated the Fed's calculus, however, and that's put the June CPI report very much in the spotlight. 

According to the Federal Reserve Bank of Cleveland, annual headline inflation is forecast to increase by 3.1%, down from the 3.3% rate seen in the May CPI report. On a monthly basis, June inflation is forecast to rise 0.1%, or essentially unchanged from the prior month. June's core CPI, which excludes volatile food and energy prices, is expected to increase 3.5% annually and 0.3% on a monthly basis. 

On the earnings front, the tempo should pick up on Thursday when Delta Air Lines (DAL) reports ahead of the opening bell. Morgan Stanley analyst Ravi Shanker says that DAL is one of the "cleanest stories" in airlines right now, citing Delta's outsized exposure to corporate travel vs peers. The analyst rates DAL at Overweight (the equivalent of Buy), calling it a "top pick."

On Friday, JPMorgan Chase (JPM), the nation's biggest bank by assets, is slated to post results, as is Citigroup (C). Jefferies analyst Ken Usdin, who rates JPM at Buy notes that loan growth for many banks remains sluggish due to high interest rates, which could continue to weigh on net interest income (NII) in the near term.

Corning stock soars on outlook

Corning (GLW) was the S&P 500's biggest gainer today, rising 12% to close at $43.05. The tech company raised its second-quarter guidance for core sales and core earnings per share. Corning cited "strong adoption of new optical connectivity products" for generative AI as the reason for the good news.

GLW stock has been a long-time market laggard, but excitement about all things AI has it beating the market by a wide margin in 2024.

For the year-to-date through July 5, GLW generated a total return of 28% vs 18% for the S&P 500, according to data from YCharts. Over the past 52 weeks, however, GLW lags the broader market by about 13 percentage points.

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