What to Expect in the Markets This Week

Following the latest jobs and unemployment numbers last week, the market will prepare this week for a Federal Reserve interest rate decision on Wednesday. It is believed that the central bank will keep rates at their current level. Shortly after the rate announcement that afternoon, Fed Chair Jerome Powell will take media questions.

Investors will also get more signals over the path of inflation when the Consumer Price Index (CPI) is released on Tuesday, which comes as other recent inflation reports have shown that prices have been increasing at a slower pace. On Wednesday, the Producer Price Index (PPI) will show wholesale prices for business, another inflation indicator.

Fewer earnings reports are scheduled this week, as earnings season has largely concluded, but there are a few tech companies scheduled to report. Oracle's earnings on Monday could indicate the strength of demand for cloud and tech products, while Adobe's report on Wednesday will help show whether the software designer's new artificial intelligence (AI) products are meeting consumer demand. Intel will be the latest chipmaker to host a launch event that points toward its AI offerings.

Monday, Dec. 11

• Oracle (ORCL) releases earnings
• Affirm (AFRM) fireside chat

Tuesday, Dec. 12

• Johnson Control (JCI) releases earnings
• Federal Open Market Committee (FOMC) meetings begin
• Consumer Price Index (November)
• Monthly federal budget (November)
• NFIB small business optimism (November)

Wednesday, Dec. 13

• Adobe (ADBE) releases earnings
• Producer Price Index (November)
• FOMC interest rate decision
• Federal Reserve Chair Jerome Powell press conference

Thursday, Dec. 14

• Costco Wholesale (COST) and Nordson Corporation (NDSN) release earnings
• Intel (INTC) "AI Everywhere" launch event
• Regeneron (REGN) ASH 2023 investor call
• Chewy (CHWY) inaugural investor day
• Initial jobless claims (Dec. 9)
• Import Price Index (November)
• Business inventories (November)
• Retail sales (November)

Friday, Dec. 15

• Darden Restaurants (DRI) releases earnings
• Industrial Production Index (November)
• Capacity utilization index (November)

Investors Watching Fed Meeting for Market Signals

Market watchers will have their focus trained on Wednesday this week, when the FOMC ends its two-day meeting with a decision on the federal funds interest rate that currently stands at 5.25% to 5.5%. Investors strongly believe that the Fed will keep rates there, with the CME FedWatch tool indicating a 98.4% chance that markets have priced in another pause at the current rate, with another 1.6% chance of a 25-basis-point hike.

Half an hour after the rate is published at 2 p.m. ET, Fed Chair Jerome Powell will take media questions. His remarks on the U.S. economic situation and how the Fed reached its rate decision can give indications on future moves, often causing markets to react in real time to Powell's comments. 

The publication of the rates could also help guide investor action in the future, as its "dot plot" serves to indicate where Fed members think the interest rate should be set at upcoming meetings. There's also a staff report on the U.S. economic outlook that can show what assessments Federal Reserve officials are considering.

Consumer, Wholesale Price Data to Show Path of Inflation.

Has inflation been conquered? The latest reading of the Consumer Price Index on Tuesday will be another step toward answering that question, as economists will be looking to see whether inflation continues its downward trend.

The most recent readings have been promising, as the Personal Consumption Expenditures (PCE)—the Federal Reserve's preferred inflation gauge—showed inflation falling to 3% year-over-year in November. Last month's CPI also looked better, with inflation dropping to 3.2% from 3.7%.

Another decline in inflation would meet consumer expectations, with the most recent Michigan Consumer Sentiment Index showing that the public believes price increases will continue to slow over the near and long term.

Competition Heats Up in the AI Chip Space

For the second straight week, a chipmaker will host an event to debut new technology and tout the AI power of its products. On Thursday, it's Intel's "AI Everywhere" launch, where the company will launch its fifth-generation Xeon processors for data centers and Core Ultra processors for laptops. The event comes after Advanced Micro Devices (AMD) held a similar launch event last week, helping move its share price up by more than 7%.

Computer graphic software maker Adobe could shed light on consumers' appetite for AI products with its earnings report on Thursday, which comes after it introduced new AI tools for Photoshop and other products this year. Database software seller Oracle will release earnings on Monday.

Investors will also get a look at some retail sectors, with an earnings report from Costco and an investor call with pet-products seller Chewy. Also, U.S. drugmaker Regeneron will update investors with results from the 2023 American Society of Hematology (ASH) conference.