The Fed is on the clock. A highly anticipated interest rate decision from the Federal Reserve takes the spotlight this week; both that decision, set for Wednesday, and subsequent remarks from Chair Jerome Powell, could move markets as he lays out the central bank’s views on the economy and more. Investors have bid up stocks ahead of the Fed meeting. The major U.S. indexes logged gains last week even after a mixed Friday finish.

U.S. retail sales data will offer insight into the state of consumer spending, as will earnings reports from cereal maker General Mills and Darden Restaurants. Shipping giant FedEx’s earnings will offer a view of overall economic conditions.  And tech investors will be watching Meta CEO Mark Zuckerberg, who on Wednesday is set to take the stage at the social media giant’s annual developers’ conference.

Federal Reserve Expected to Make First Rate Cut This Year
Investors expect the Fed to lower interest rates for the first time this year on Wednesday. The rate decision comes as recent job reports signaled a weakening labor market, but inflation remains elevated. Following the decision, investors will be scrutinizing remarks from Fed Chair Jerome Powell as he details the central bank’s views on monetary policy.

U.S retail sales data for August, due Tuesday, comes amid signs that tariffs haven’t significantly weighed on consumer spending. Data on August housing starts is scheduled for release on Wednesday. Builders have been struggling to fill a massive U.S. housing shortfall as high construction and borrowing costs continue to weigh on the market. Investors will also be watching jobless claims on Thursday after recent reports have shown job growth slowing and layoffs increasing.

Meta Conference, FedEx Earnings in the Corporate Spotlight
On Wednesday evening, Meta CEO Mark Zuckerberg will kick off the company’s annual Meta Connect conference, where the Facebook parent is expected to focus attention on product offerings like its AI glasses. The social media giant is devoting significant resources to AI, including big paydays for top talent.

FedEx is set to report earnings after markets close on Thursday. The shipping giant suspended its full-year outlook last quarter amid uncertainty around U.S. tariffs. Earnings reports from cereal maker General Mills on Wednesday and Olive Garden parent Darden Restaurants on Thursday could shed more light on how consumers are faring.

Cryptocurrency exchange Bullish is scheduled to post its first earnings report as a public company on Wednesday, a month after making its trading debut.

What analysts are saying about U.S. stocks

Morgan Stanley: “Evidence is growing that the rolling recovery is underway, and we continue to lean toward our 7200 bull case by the middle of next year. Near-term risk is centered on the tension between lagging, weak labor data and the Fed’s response that may not meet the markets’ “need for speed.””

Evercore ISI: Whether the Fed is cutting Because They Can (cooling inflation) or Because they Have To (head off Recession) is critical. 12M forward returns are robust when They “Can”, and anemic when They “Have To”. Stocks tend to be choppy in the near term either way when the Fed starts cutting.”

JPMorgan: “With respect to equities, overall indices historically have tended to consolidate as the Fed resumed easing, stalling for a few months, and would advance thereafter. In contrast, investors appear to be using the upcoming easing as a reason to look through the current labour market soft patch, with the U.S. market hovering at highs, but the risk is that this changes. Once the easing resumes, equities could turn more cautious for a bit, and price in some more downside risk, in effect repricing the current, potentially complacent, stance.”

RBC Capital Markets: “We are introducing preliminary forecasts for the S&P 500 for 2026 of 7,100 (a 2H26 price target) and $297 (full-year 2026 S&P 500 EPS). We anticipate revising these numbers and think they should be viewed as a very early indication of how our models are tracking at the moment. Near term, though we are nudging our YE2025 price target up to 6,350 from 6,250 (mostly due to moving up our full-year 2025 EPS forecast to $269), we remain on guard for choppy conditions in coming months.”