Us stocks stabilized and rebounded last week after a new sell-off that began in early June, with all three major indexes up more than 5 per cent. Against a backdrop of growing signs of slowing economic growth and adjustments in commodity prices, investors have begun to reassess expectations of aggressive interest rate hikes by the Fed, but the risk factors that have plagued the economy and investor sentiment have not been completely removed. the market may still face volatility tests in the second half of the year.

In the U. S. stock market, traders will keep a close eye on personal consumption expenditure (PCE) data this week.The Bureau of Economic Analysis will release its monthly personal consumption expenditure deflator (PCE deflator) on Thursday to provide investors with an update on overall inflation in the US economy as the Federal Reserve raised its key benchmark interest rate this month to curb price rises.

Economists expect the US PCE price index to grow at a monthly rate of 0.7 per cent in May, up from 0.2 per cent the previous month. The index is expected to grow 6.4 per cent compared with the same period last year, up from 6.3 per cent in April.

Core PCE, which strips out food and energy costs, is expected to be flat from the previous month. Economists expect core PCE to grow 5.1 per cent in May, compared with 5.1 per cent in April.

The latest consumer spending data come as the Fed's measures to fight inflation are becoming increasingly complex and a growing number of Wall Street analysts and strategists believe that the Fed will not be able to control prices without plunging the US economy into recession.

Economist Mohamed El-Erian said last week: "I do worry that the possibility of a soft landing has fallen sharply because of a series of mistakes made by the Fed. A soft landing means reducing inflation without unduly damaging growth and employment. "

For other economic data, investors will keep a close eye on durable goods data released this week, the Conference Board Consumer confidence Index, and several manufacturing and housing market reports. Investors will also see the final GDP figures for the first quarter.

In the US stock market, although investors still expect risk assets to become more volatile in the future, strategists believe that the US stock oversold market will usher in a positive momentum window in the short term, and that the end of the quarter may be the time for the market to rise rapidly.

Considering that Thursday (June 30) is also the last trading day in the first half of this year, many fund managers like to adjust their positions at this time.Marko Kolanovic, chief market strategist at JPMorgan Chase & Co, believes that against the backdrop of the sharp decline in the first half of the year, the adjustment alone could lead to a 7 per cent increase, given that fund managers have to increase their holdings to restore their positions.

Kolanovic further said that the recent "position adjustment week" has led to a rise in the market, this time the same story is possible. For example, there was a similar sharp rebound at the end of the first quarter and the end of May this year. This usually happens in an illiquid environment and, more importantly, the market is oversold, cash levels are at an all-time high, and recent short-selling levels in the market have not been seen since 2008.

He pointed out that the recent adjustment of fund managers' positions is good for the stock market, and this time may be no exception. Us stocks, for example, fell about 10 per cent towards the end of the first quarter and rebounded sharply by 7 per cent in the last week of the quarter. The same happened during a smaller rebalancing in may, when the stock market rose about 7 per cent at the end of the month after falling about 10 per cent.

In addition, Sam Stovall, chief investment strategist at CFRA, said that for now, the market is likely to move higher before the earnings season begins.

"if history repeats itself, from an timing point of view, we now have a tradable rebound," he said. But he added that this could lead to investors eventually pulling out of the market when the current earnings season showed a decline.

If US stocks were close to their current levels at the end of the second quarter, it would be their worst first-half performance since 1970. But Stovall believes that a bad first half does not necessarily mean a bad year. Us stocks rose in the second half of the five worst years since 1929, with an average increase of 23.7 per cent. Of the five years with the worst performance in the first half of the year, four fell in the second half of the year, with an average decline of 7.8%.