Lewis Krauskopf reports that upcoming U.S. employment data and Broadcom earnings will test the current market rally.
Investors are preparing for a critical week of economic data and corporate results that will determine the trajectory of the current U.S. stock market rally. The S&P 500 has gained over 12% this year, driven largely by robust corporate profit growth from massive spending on AI infrastructure. Market analysts are closely watching the monthly U.S. employment report due on September 4. This data is expected to provide essential clues regarding the Federal Reserve's plans for interest rates as the central bank works to manage inflation. While the July report showed a surprise labor-market weakening, analysts suggest the market is looking for confirmation of a trend or a potential bounce back. Additionally, the market will focus on quarterly results from semiconductor company Broadcom. Following a strong report from Nvidia, investors are looking for similar visibility into the AI sector. S&P 500 second-quarter earnings are currently on pace to rise 34.5% from a year earlier, indicating strong core earnings power across the economy.