Markets Await for Key Inflation Report

Market Overview - Major indexes reached record-setting closing highs last week, but pre-market futures indicate a sell-off with the Dow down 170 points, S&P 500 down 22 points, Nasdaq down 92 points, and Russell 2000 down 5.5 points [1] - Bond yields remain flat, with the 10-year yield at 4.13% and the 2-year yield at 3.58% [1] Earnings Reports and Economic Data - No major earnings reports or economic data are expected today, as the market is in between quarterly earnings seasons [2] - Early Q3 earnings season is considered underway, with companies like FedEx already reporting [5] - Upcoming earnings reports include AutoZone, Micron, KB Home, and Costco [5] Economic Indicators - This week will see the release of New & Existing Home Sales figures for August, flash Services PMI from S&P and ISM, Retail/Wholesale Inventories, Durable Goods Orders, and the final print on Q2 GDP [6] - Personal Consumption Expenditures (PCE) for August will be released on Friday, which is the Fed's preferred gauge of inflation [6] Inflation Metrics - Headline PCE year over year is expected to increase by 10 basis points to +2.7%, following two months at +2.6% and a low of +2.2% in April [7] - Core PCE year over year is expected to remain at +2.9%, consistent with previous months [8] - The Fed's optimal inflation level is +2.0%, with the closest metric reaching +2.6% in April of this year [8]