As of press time, the three major indices collectively rose. The Dow Jones rose 0.6%, the S&P 500 Index rose 0.24%, and the Nasdaq rose 0.17%.

The S&P 500 index has recorded gains in four of the past five weeks. Investors have been optimistic that easing inflation pressures and potential weakness in the U.S. economy this year will prompt the Federal Reserve to cut interest rates.

If the general data of CPI shows that the current inflation has improved slightly as expected, the possibility of a rate cut by the Federal Reserve this year will be further enhanced. Investors will also welcome the release of the PPI in June on Friday.

Last week's non-farm employment data reflected a slight cooling of the US labor market, strengthening expectations of a rate cut. Although the US economy added more jobs in June, the unemployment rate unexpectedly rose from 4% to 4.1%.

Investors believe that last Friday's non-farm employment report increased the probability of a rate cut by the Federal Reserve in September. The futures market now shows a 77% probability of a rate cut. The market also expects a 53 basis point rate cut this year, up from about 40 basis points a month ago.

According to the CME FedWatch tool, traders currently expect two rate cuts in 2024, with the first in September.

Greg Wilensky, head of US fixed income at Janus Henderson Investors, said: 'The June non-farm employment report has dominated the market's first expected rate cut in terms of predicting CPI inflation data that will be released soon. Signs of continued slowing economic growth and labor market, may at least be short-term bullish for stocks and high-yield bonds.'

Important CPI inflation data has become a betting indicator, and the "Trump trade" may cause the US bond yield curve to steepen.

The presidential debate on June 27th seems to have paved the way for Trump to return to the White House. After that, strategists from banks such as Citigroup, JPMorgan and Morgan Stanley have been promoting the so-called "Trump Trade".

These analysts believe that the Republican Party's policies on trade, immigration, and deficits will lead investors to demand higher yields on long-term bonds. New signs of a soft job market have strengthened expectations in the market that the Federal Reserve will cut interest rates this year, pushing short-term bond yields sharply lower.

Several large commercial banks including Citigroup and JPMorgan will begin to release their second quarter financial reports this week. PepsiCo and Delta Air Lines will also announce their performance this week.

Some Wall Street strategists believe that U.S. companies need to have a big harvest in the upcoming earnings season, in order for U.S. stocks to continue their record-breaking rally.

Citigroup strategist Krollner wrote in a report: "Given the high implied growth expectations, the market may need to see solid execution drivers with rising earnings to maintain the recent rally or push it to higher levels." The concern is that, while the fundamental trends are positive and consensus expectations can be met, valuations suggest that buyers may demand more.

Goldman Sachs strategist Kostin said in a recent report that this trend may be repeated in the second quarter. His team estimates that profit growth expectations have reached the highest level in nearly three years, and investor sentiment is also high. He said, "Therefore, although not as extreme as the first quarter, this quarter's return on investment above expectations should be below average."

Federal Reserve Chairman Powell will deliver his semi-annual testimony to the House and Senate Banking Committees on Tuesday. The market will pay attention to his judgment on the inflation situation and his views on future monetary policy paths.

Focus stocks

Large technology stocks varied, with Taiwan Semiconductor and Nvidia up more than 3%, AMD up nearly 3%; Tesla down more than 2%, Meta down more than 1%, Apple down nearly 1%; UBS raised Nvidia's target price from $ 120 to $ 150.

$NVIDIA (NVDA.US)$Up nearly 4%, UBS Group raised Nvidia's target price from $120 to $150.

$Taiwan Semiconductor (TSM.US)$Rising more than 3%, with a peak increase of over 4% in trading, the market cap approaches nearly $1 trillion. According to analysts from multiple Wall Street banks, due to the ongoing global shortage of high-end wafer foundry, Taiwan Semiconductor is expected to raise its full-year sales expectations in next week's earnings report.

$Intel (INTC.US)$It rose more than 5%. In terms of news, Intel recently announced its new generation of data center immersion liquid cooling solutions.

$Paramount Global-A (PARAA.US)$It rose more than 5%, and the board of directors agreed to merge with Skydance in a deal valued at over $8 billion.

Biopharmaceutical Company$Morphic (MORF.US)$It surged nearly 75%. Eli Lilly and Co will acquire Morphic for $57 per share in cash to improve patient treatment outcomes.

Editor / jayden