US-China trade, inflation, Apple's big event: Here's what the stock market is watching this week
Investors will be monitoring a host of potentially market-moving events this week, with updates due on trade and inflation, while Apple kicks off a highly anticipated product event.
Recession fears have edged down after the turmoil that racked markets earlier in the spring, but the market is still struggling with uncertainty regarding President Donald Trump's trade policies and their implications for the economy.
While last week's jobs report showed a solid labor market, investors are monitoring how the inflation side of the Federal Reserve's dual mandate fares this week, and how it will influence the rate-cut outlook for the year.
Meanwhile, Apple's Worldwide Developers Conference will provide insight into not only new software updates but also the future of the AI race among mega-cap tech companies.
Here's what investors are watching this week.
US-China trade talks
After last week's phone call between Trump and Chinese president Xi Jinping, China and US trade officials are meeting in London on Monday for two days of trade negotiations.
Last month's trade talks were key to calming recession fears and helped propel the S&P 500 to its highest levels since February, but concerns still remain. The biggest negotiation topic will be over China's exports of rare earth metals, which are critical components in manufacturing semiconductors, smartphones, and other technologies.
Continued improvements in trade relations between the two countries will be critical to reducing volatility in the market and could shed clarity on the direction of tariff rates.
CPI data
The consumer price index for May will be released on Wednesday. Last month 's reading of 2.3% was fairly benign, but investors will continue to watch for signs of Trump's tariffs showing up in the hard data.
Importantly, the reading will be key in determining the Fed's next move. The median forecast is for annual consumer inflation to have risen 2.5% last month. Meanwhile, expectations for the June 17 Fed meeting are for officials to keep interest rates unchanged.
"The big surprise could be how little Trump's tariffs are boosting inflation despite upward pressures on prices-paid and prices-received indexes in the Fed's regional business surveys," wrote on Sunday.
Yet, some strategists have predicted that inflation will pick up in the back half of this year, spurring stagflation concerns.
Meanwhile, consumer sentiment will get a fresh reading on Friday. Sentiment has been low as Americans feel pessimistic about tariffs, though hard data that the Fed looks at has held up.
Apple's Worldwide Developers Conference
All eyes will be on Apple this week as it kicks off its annual Worldwide Developers Conference, where the company is expected to unveil new AI features embedded in iOS 19.
The conference will be an opportunity for Apple to address several headwinds it has faced this year.
"In a nutshell WWDC is a pivotal moment in Apple's future as the developers are the hearts and lungs of the Cupertino growth story with the Street being laser-focused on Apple today," Wedbush analyst Dan Ives wrote.
The tech giant has trailed peers like Microsoft and Google in the AI race, and its stock has taken a beating this year as the worst-performing Magnificent Seven member, largely due to concerns about tariffs and iPhone production. Last month, Trump threatened a tariff of at least 25% on iPhones not made in the US.
Investors will be looking for updates on Apple Intelligence as well, as the company's AI offering has been underwhelming to Wall Street.
A key bond auction
The US Treasury sells a lot of bonds, and usually the sale is unremarkable for markets. However, with deficit concerns running high as the GOP budget bill moves through Congress, a $22 billion auction of 30-year bonds on Thursday could move the market if demand appears weak.
A weak sale of 20-year bonds last month rattled markets and sent yields surging, and all eyes are on this week's sale as a potential investor referendum on the sweeping tax and spending bill.
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