What do you know this week?

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Stocks are back near record highs, with the S&P 500 ending Friday at 4,959, its highest closing level ever. All three major indices posted gains during the week, after a turbulent week of trading.

Stocks initially fell after lackluster technology results from Microsoft (MSFT) and Alphabet (GOOG, GOOGL), and were sold off further on Wednesday when Fed Chair Jerome Powell said a March rate cut was not the “base case.”

But massive earnings from META and Amazon (AMZN), plus a stronger-than-expected January jobs report, sent stocks into rally mode.

During the week, the S&P 500 (^GSPC) and Dow Jones Industrial Average (^DJI) rose more than 1% while the Nasdaq Composite (^IXIC) rose less than 1%.

A slew of corporate earnings including reports from Eli Lily (LLY), Disney (DIS), Spotify (SPOT), McDonald's (MCD), Chipotle (CMG), and Pepsi (PEP) will welcome investors next week amid a light economy. . Schedule.

Debate continues over interest rate cuts

Federal Reserve Chair Jerome Powell poured cold water on investors' hopes for a March rate cut during his news conference following the Fed's January meeting. Powell said the central bank needs “more confidence” in inflation's downward path before cutting interest rates.

Economists believe the January jobs report, which showed the US economy added 353,000 jobs in the month, strengthens the Fed's argument that it can wait to cut interest rates without pushing the economy into recession. But the report also raised concerns about accelerating inflation, with wages increasing by 4.6% during the month, the highest pace of growth since July 2023.

“Following Wednesday’s FOMC meeting, we maintained confidence in our expectations for a March rate cut,” Thomas Simons, US economist at Jefferies, wrote in a note to clients on Friday. “However, after today's data, it's hard to see how that will play out. Barring a big turnaround in February data, or very weak inflation data between now and mid-March, the FOMC will likely hold. Interest rates are stable in March. “

Investors now place a roughly 20% chance of a rate cut at the March meeting. According to CME FedWatch. On Thursday, there was about a 40% chance, and a month ago it was about 80%.

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Corporate earnings appear to have come to a close last week. After S&P 500 earnings fell more than 1% this quarter, a batch of earnings last week upended the headline narrative with earnings wins for tech companies Apple, Meta, Alphabet, Amazon and Microsoft, according to FactSet.

The latest data from FactSet shows that earnings are expected to grow 1.6% in the fourth quarter. It is worth noting that the first quarter estimates were also verified. Last month, analysts cut first-quarter earnings estimates by 1.4%, below the five-year average of 2.1%.

104 S&P 500 companies are scheduled to report earnings this week, according to FactSet.

Generally quiet on the economic front

After an onslaught of economic data that showed the US economy got off to a hot start in the first quarter, investors will have a few data points to analyze next week. Weekly initial jobless claims will continue to be closely tracked as companies announce layoffs, while Monday's activity update in the services sector will attract investors' attention.

ORLANDO, FL - FEBRUARY 01: A sign welcomes visitors near the entrance to Walt Disney World on February 01, 2024, in Orlando, Florida. A federal judge dismissed a lawsuit against Florida's governor. Ron DeSantis, owner of the Walt Disney Company. She said she would appeal her loss in a lawsuit. The case revolves around the governor taking over management of the special Disney area after Disney opposed Florida legislation, which critics have called... — A sign welcomes visitors near the entrance to Walt Disney World in February. 1, 2024, in Orlando, Florida. (Joe Raedle/Getty Images) (Joe Rydell via Getty Images)

Weekly calendar

Monday

Earnings: Allegiant (ALGT), Caterpillar (CAT), Chegg (CHGG), Estée Lauder (EL), McDonald's (MCD), Palantir (PLTR), Tyson (TSN)

Economic News: S&P Global US Services PMI, January final (52.9 expected, 52.9 previous), S&P Global Composite PMI, January final (52.3 expected), ISM Services, January (52 expected, 50.5 previous)

Tuesday

Earnings: Amgen (AMGN), Chipotle (CMG), Elf Beauty (ELF), Eli Lilly (LLY), Spotify (SPOT), Fiserv (FI), Ford (F), Hertz (HTZ), BP (BP), Snap (SNAP), Toyota (TM)

There is no notable economic news.

Wednesday

Earnings: Alibaba (BABA), ARM Holdings (ARM), CVS (CVS), Mattel (MAT), Paycom (PAYC), PayPal (PYPL), Roblox (RBLX), Uber (UBER), Walt Disney (DIS), Wayne Resorts (Wayne)

Economic News: MBA Mortgage Applications, February. II (-7.2% previously), Consumer Credit, December ($16.5 billion expected, $23.75 billion previously)

Thursday

Earnings: Affirm (AFRM), Aurora Cannabis (ACB), Bill.com (BILL), ConocoPhillips (COP), Expedia (EXPE), Hershey's (HSY), Pinterest (PINS), Spirit (SAVE), Take-Two Interactive ((Ttu)

Economic News: Initial Jobless Claims, February. 3 (215,000 expected, 224,000 previous), Wholesale Inventories Monthly, December Final (0.4% previously), Wholesale Sales Monthly, December (previously 0%)