With the US earnings season drawing to a close, a smoke screen could disappear, meaning investors are now likely to focus increasingly on unresolved issues again. Investors are wavering between geopolitical nervousness, hopes for interest rate cuts, and doubts about high AI valuations. The hope for a major breakthrough in the Iran conflict is likely to keep investors engaged. The market is once again dominated by the notorious calm before the storm. Despite the long wait, investors clearly have not yet lost faith in a durable peace treaty. Investors have been disappointed too often in recent weeks for limited optimism to prevail now. Past signals of de-escalation in the Iran war should not obscure the fact that the situation in the Middle East remains fragile and the recent zigzag course could enter the next round at any time. The highlight is expected to be the publication of US inflation data, which is anticipated midweek.
Dow Jones Industrial Average Index
Iran war still in view – Geopolitical risks likely to continue to haunt investors for the time being
Developments in the Iran war are likely to continue to determine the success or failure of the stock market. Regarding Iran, the US is currently holding back, according to statements by Donald Trump. He is reportedly playing for time and banking on the country's economic collapse. One of the central points of contention remains, not least, the discussion surrounding the complete reopening of the Strait of Hormuz.
US inflation in focus on Wednesday – Monetary policy impulses conceivable
In a trading week that is comparatively quiet from the perspective of the economic calendar, potential market drivers are likely to repeatedly move into the focus of market participants. US inflation data is expected in the afternoon (2:30 PM) and could consequently also provide monetary policy cues.
In addition to the consumer price index, the core inflation rate, which excludes the drivers of energy and food, is also coming into focus. This rate is considered significant, not least with regard to the assessment of inflation within the ranks of the Fed. Economists expect an inflation rate of 3.4 percent compared to the same month last year, following 3.5 percent in June. For the core rate, a value of 2.5 percent is expected, following 2.6 percent in the previous month.
More economic data ahead – producer prices, retail sales, and consumer confidence
On Thursday, US producer prices will also follow, which could likewise provide important inflation signals (2:30 PM). US retail sales must also be watched on Friday afternoon (2:30 PM), as they are likely to provide economic indicators.
From the perspective of the economic calendar, the trading week concludes with consumer sentiment from Uni Michigan (at 4:00 PM).
US earnings season is winding down – second- and third-tier companies are reporting earnings
During the reporting season, second- and third-tier companies present their results for the past business quarter. Super Micro Computer (ISIN: US868000U302), for example, reports on Tuesday, Cisco Systems (ISIN: US17275R1023) on Wednesday, and Applied Materials (ISIN: US0382221051) on Thursday.
