With the majority of S&P 500 companies posting quarterly results, investors’ focus will turn to inflation and the consumer price index next week. The three major indexes are on track to end the week down, with the S&P 500 poised to post its worst performance since December. Despite the losing week, all three averages are still up for the year, giving see the strength of the January rally. Those weekly losses come despite a rally on Tuesday that sent the Dow Jones Industrial Average up 250 points and the Nasdaq Composite 1.9% higher than it started the session following fresh comments. by Federal Reserve Chairman Jerome Powell. The Nasdaq is set for the biggest weekly drop of the three benchmark indexes, falling more than 2% on Friday afternoon. The steep decline for Alphabet, down more than 9% this week, has dragged on the tech-heavy index. .IXIC .SPX,.DJI Mountain 5D Three Key Indicators During a chat at the Economic Club of Washington, DC on Tuesday, Powell said inflation has begun to ease but there is still a long way to go. . That echoes comments he made last week at a press conference following the announcement of the latest rate hike of 25 basis points. But Shana Sissel, founder of Banríon Capital Management, said the market fell over the weekend as investors repositioned while “digesting” the full extent of rate hikes, economic data and commentary from Fed speakers. She noted last Friday’s jobs data, which broke expectations, and pointed to continued strength in the labor market, as one of the cross-investors must weigh. What’s more, some said the market initially ignored parts of Powell’s commentary in favor of language around inflation starting to ease, which they saw as a boon for those hoping to avoid economic recession. “Investors only hear what you want to hear,” said Eric Sterner, chief investment officer at Apollon Wealth Management. “People just take… which Powell said is ‘de-inflation’ and run with it. We don’t listen to the full context.” Earnings season also continues throughout the week, led by popular consumer-focused companies like Disney, Chipotle, and PepsiCo. Disney stock is on track to end the week down more than 2%. The drop came despite Disney’s latest quarterly report, which showed a smaller-than-expected drop in subscribers to its streaming service, along with earnings and revenue that beat publishers’ estimates. analysis. As of mid-Friday, just under 70% of companies in the S&P 500 had reported earnings, according to FactSet. Of those companies, about 70% reported exceeding expectations, a smaller percentage than the three-year average calculated by The Earnings Scout. Consumer Price Index of January With Powell’s latest speech in the book, investors are now looking at the consumer price index to better understand the pace of inflation. January data for the index, which tracks the prices of a broad basket of commodities as a gauge of inflation, will be released on Tuesday. Economists polled by Dow Jones forecast headline CPI to rise 0.4% on a monthly basis and increase 6.2% year-over-year. Market watchers will keep a close eye on the CPI as they see the Fed’s next moves closely in line with the evolution of inflation. “Next week is really about one thing, and that is the CPI,” said Scott Ladner, chief investment officer at Horizon Investments. “If it continues to show signs of deflation and continues to show signs of being under control or on track, the Fed could allow growth to remain strong.” Hopes for a continuation of the downtrend after December’s 0.1% monthly drop may be unlikely, given the possibility of inflation staying in place, according to Vanguard senior economist Andrew Patterson. hidden will remain high. But Patterson said some indicators such as data from Zillow suggest the pace of housing price growth could slow by mid-2023, while data in the services sector also shows signs of cooling. Those findings bolster his prediction that inflation will end the year lower. Although Patterson predicts inflation will end the year below 3%, he said it may not get any closer to the 2% mark – the Fed’s target – until the end of 2024. Investors will also follow. closely monitor retail sales data for any signs that consumer health is weakening. , said Sal Bruno, chief investment officer of IndexIQ. Economists predict that retail sales rose 1.7% in January, according to Dow Jones. “Retail sales and CPI are really driven by consumers and a lot of eyes are on how consumers are doing,” said Bruno. “That could go a long way toward trying to set the tone for next week in terms of established actions based on those numbers.” The final leg of earnings season also continues next week, with companies like Coca-Cola, Marriott, Cisco, Marathon and Paramount to report. Last week’s earnings Monday: Arista Networks , Cadence Design Systems Tuesday earnings: Leidos Holdings , PerkinElmer , Coca-Cola, Marriott International, Zoetis , Eversource Energy , Exelon , Howmet Aerospace , FirstEnergy , Ecolab , Akamai Technologies 6 a.m.: NFIB Small Business Index [January] 8:30am: Consumer Price Index [January] 1 p.m.: Philadelphia Fed President Patrick Harker speaks Wednesday Earnings: Biogen, Waters, Fidelity National Information Services, Westinghouse Air Brake Technologies, Kraft Heinz, Analog Technology, Generac, Martin Marietta Materials, Devon Energy, Cisco Systems, Republic Services , Synopsys , Equinix 8:30 am: Empire State Index [February] 8:30: Retail [January] 9:15: Industrial production [January] 10:00 am: Business inventory [December] 10 a.m.: NAHB . Housing Market Index [February] Earnings Thursday: Epam Systems , AIG , Hasbro , Organon , Paramount Global , Rollins , Zebra Technologies , Albemarle , American Water Works , LabCorp , Marathon Oil , Welltower , Constellation Energy , EQT , Henry Schein , Host Hotels & Resorts , Tyler Technologies , CF Industry , Entergy , Invitation , Swimming Pool , Vulcan Materials , Southern Company , Applied Materials , Bio-Rad Laboratories , Digital Realty Trust 8:30 am: Housing and building permits commenced build [January] 8:30 a.m.: Jobless claims 8:30 a.m.: Philadelphia Fed Index [February] 8:30: Producer price index [January] Friday earnings: CenterPoint Energy , Deere , PPL 8:30 am: Import and export prices [January] 10 a.m. ET: Top Indicators [January]