U.S. stocks rose on Monday and remained near all-time highs, as investors awaited key inflation data this week to provide further clues about interest rates.

The previous week, the major indices closed weaker after the release of stronger-than-expected purchasing managers’ index readings, which increased concerns that the U.S. economy would remain robust, giving the Federal Reserve more room to keep rates high.

Nonetheless, enthusiasm about artificial intelligence led to weekly gains, and the S&P 500, a broad-based benchmark index, hit a new intraday high. Year-to-date, it is up nearly 15%, while the tech-heavy Nasdaq Composite has gained nearly 18%.

In contrast, the Dow Jones blue-chip index lagged behind, rising slightly less than 4% during the first half of the year. 

PCE inflation will be released this week

This week, investors will focus primarily on PCE inflation data, which will be released on Friday.

The reading is the Fed’s inflation gauge of choice, and is likely to influence the Fed’s determination regarding interest rate cuts.

The PCE reading is expected to signal that inflation cooled slightly in May, but remained above the central bank’s annual target of 2%.

Estimates of a possible interest rate cut had driven Wall Street indexes to record highs through June, even as the Federal Reserve indicated that persistent inflation and the strength of the economy kept the likelihood of such a scenario low.

Likewise, Wall Street also appeared to be close to taking profits, mainly in the technology sector, after a brilliant run in 2024.

FedEx and Micron results in perspective

FedEx (FDX), a courier and logistics company whose strong results are also used as indicators of global economic activity, will report its results for the quarter ended in May on Tuesday.

On Wednesday, memory chip maker Micron Technology (MU) will release its quarterly results, after forecasting a significant pickup in demand in the fast-growing artificial intelligence sector. 

Sportswear producer Nike (NKE) and pharmaceutical retailer Walgreens Boots Alliance (WBA) will report their results on Thursday.

Oil prices rise on demand 

Oil prices rose on Monday, continuing last week’s positive pace on signs of stronger demand for petroleum products in the United States, the world’s top consumer.

The market was also supported by worsening geopolitical conditions, as the risk of an all-out war between Israel and Hezbollah grows, extending the conflict with Hamas and affecting expectations of supply disruptions in the Middle East.

Ongoing clashes between Russia and Ukraine, with Kyiv targeting major Russian refineries, also stoked concerns about supply disruptions.