Here are the 4 big things we're watching in the stock market in the week ahead

CNBC

15 hours ago

Wall Street is heading into a holiday-shortened week of trading — but there's unlikely to be a shortage of news for investors to process thanks to heightened geopolitical tensions and a pivotal Federal Reserve meeting. Here are the four big things we're watching in the week ahead. 1. Geopolitics. The fallout of the Israel-Iran attacks figure to shape global financial markets in the coming days and potentially much longer depending on where the tense situation goes from here. The developing conflict underscores that geopolitics are firmly on our radar, beyond just trade talks. Stocks fell and oil prices surged Friday on the first round of strikes. Over the weekend the attacks escalated, with Israel's military targeting key oil infrastructure in Iran — a potentially market-moving development. On the trade front, we're keeping a close eye on whether we get any meaningful updates on U.S. agreements with other countries. The expiration of President Donald Trump's 90-day "reciprocal" tariff pause is set for July 9, though Treasury Secretary Scott Bessent said last week that extensions could be given for countries that are negotiating with the U.S. in "good faith." So, perhaps we learn of some extensions being dolled out. 2. Fed meeting. The Fed's two-day policy meeting is the biggest economic event of the week. Despite Trump's pressure for interest rate cuts, the market widely expects the U.S. central bank to leave rates unchanged in the range of 4.25% to 4.5%. As usual, Chair Jerome Powell's press conference at 2:30 p.m. ET will be influential, as investors try to understand how the Fed is balancing both sides of its dual mandate of maximum employment and price stability during the trade war. The labor market has been resilient, but there's also been clear signs of softening, with recurring jobless claims being at their highest levels since November 2021. Recent inflation data has come in cooler than expected, supporting the case for rate cuts. However, many argue the full effects of elevated tariffs haven't shown up in the data yet. "If it weren't for these prospective tariffs that will flow through — and are flowing through — I think the Fed would be on their front foot looking to cut rates now," Robert Kaplan, the former Dallas Fed president, said Friday on CNBC. And while it's too early to know whether the Middle East tensions will lead to a sustained increase in the price of oil, it represents another wrinkle to the economic picture. U.S. oil prices falling into the low-to-mid $60s a barrel this year had contributed to inflation declines and gave consumers more money in their pockets to spend elsewhere. Kaplan said the Fed will watch the Israel-Iran situation "carefully" to determine what impact, if any, it will have on the global economy. "They'll watch it like the rest of us. They'll watch it to day to day," he said. This meeting is one of the four each year when the Fed provides individual members' expectations for rate cuts in what's known as the "dot plot." The quarterly Summary of Economic Projections also will contain a refreshed outlook for GDP growth, unemployment and inflation as measured by the personal consumption expenditures (PCE) index. 3. Economic data. While the week ahead lacks a major inflation or monthly payroll report, there are still some noteworthy releases that can inform our understanding of the U.S. economy. On Tuesday, we get the Census Bureau's retail sales report for the month of May. In the April report we saw less stockpiling to beat tariffs than in March. The question for May is how resilient consumer spending proved to be. The CEO of Club name Capital One , Richard Fairbank, said at an industry conference Tuesday that its internal card data hasn't shown a major effect from tariffs. "Despite all the noise out there and the tariff news and everything, even when we look at the very latest daily data on things like spending data or anything related to consumer behavior, we just don't see an effect," he said. Also on Tuesday morning, the Bureau of Labor Statistics releases its monthly look at U.S. import and export prices — a report that historically hasn't gotten a ton of attention, but now provides another way to measure the impact of tariffs. Before we hear from the Fed on Wednesday, new housing starts and initial jobless claims are both set to be released at 8:30 a.m. ET. (With the market closed Thursday for Juneteenth, jobless claims are out a day earlier than normal.) We're interested in the housing starts data because more activity in that sector benefits Club name Home Depot , and more homes being built in the U.S. should help on the inflation front . Shelter inflation remains sticky. Plus, as Jim Cramer likes to say, housing punches above its weight in the economy because people moving into homes end up buying a lot more than just the structure itself. As discussed above, the jobless claims data will be important due to its implications for Fed policy and what it says about the U.S. economy overall. Both first-time filings and continuing claims are relevant in this moment. 4. Earnings. No Club names are set to report in the coming days, but we will be watching what the homebuilder Lennar has to say on Monday night, followed by Olive Garden parent Darden Restaurants on Friday. Lennar is notable for the same reasons we care about the housing starts data. As for Darden, its results and commentary on consumer spending trends can provide a read-through to Club holding Texas Roadhouse . It's no secret that we're big fans of earnings reports around here because they allow us to hear real-time updates from management teams on conference calls. Sure, the results are backward-looking, but their forecasts and commentary factor in the latest information. In such a dynamic environment, where tariff rates are fluid and tensions are flaring, earnings reports arguably become even more valuable for investors. By contrast, the factors that influenced an official government report on the economy might be way different than when we receive that information. Week ahead Monday, June 16 Empire State Manufacturing Index at 8:30 a.m. ET After the close: Lennar Corp (LEN) Tuesday, June 17 Census Bureau's retail sales report at 8:30 a.m. ET Import and Export Price Indexes at 8:30 a.m. ET Capital Utilization and Industrial Production Data at 9:15 a.m. ET Before the bell: Jabil (JBL) After the close: Beyond Air (XAIR), La-Z-Boy (LZB) Wednesday, June 18 Initial jobless claims at 8:30 a.m. ET Housing starts at 8:30 a.m. ET Federal Reserve policy meeting meeting ends at 2 p.m. ET Before the bell: GMS Inc. (GMS) After the close: Smith & Wesson Brands (SWBI) Thursday, June 19 U.S. stock closed in observance of Juneteenth Friday, June 20 Philadelphia Fed Manufacturing Index at 8:30 a.m. ET Eli Lilly presentation at American Diabetes Association's Scientific Sessions at 6:30 p.m. ET Before the bell: Kroger (KR), Accenture (ACN), Darden Restaurants (DRI), CarMax (KMX) (Jim Cramer's Charitable Trust is long TXRH, HD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . 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