Inflation will loom large this week, with the government releasing new Consumer Price Index data and big bank earnings shedding light on how Americans are keeping up. The June CPI reading, due Tuesday, comes as factors shaping the cost-of-living are in flux and Federal Reserve officials eye the possibility of higher interest rates. The CPI jumped 4.2% year-over-year in May, driven by a spike in fuel prices. Fed Chair Kevin Warsh has suggested that inflation risks may be abating, though he spoke before President Donald Trump declared the ceasefire over. Investors will get the chance to hear from Warsh when he testifies before Congress Tuesday.

Meanwhile, a handful of big national banks are reporting their second-quarter results this week. Bank executives are likely to discuss the outlook for IPOs, mergers and acquisitions, trading activity, and the state of the U.S. economy at large. Most of the major banks handed in better-than-expected numbers last quarter, but their leaders laid out a number of concerns. JPMorgan Chase CEO Jamie Dimon worried about stagflation, to name one, while Goldman Sachs Chief David Solomon said uncertainty may limit IPOs. Hurdles aside, financial sector stocks have recently been one of the stock market’s top-performing sectors. The industry is seeing commercial and industrial loan growth and brisk capital markets activity thanks to enthusiasm over AI. Some analysts expect the momentum to continue.

What analysts are saying about U.S. equities

JPMorgan: “Despite the spike in geopolitical uncertainty in Q2, it is encouraging that 2026 EPS projections kept moving higher, something that is seen in all regions and is not solely the result of IT and energy. In fact, the majority of sectors in MSCI AC World have seen net upgrades year to date. The Iran conflict is flaring up again, but we think one keeps using the dips driven by this to add the same stance we had since the 2nd half of March.

Goldman Sachs: “Earnings growth should determine the overall direction of equity market travel, but we would expect stocks to struggle in the short term if the Fed were to hike. Three reasons: First, while growth is more important than rates for equities, Fed tightening would weigh on the market outlook for growth. Second, the AI boom has made the current cycle particularly capital-intensive, increasing the likely sensitivity to changes in the cost of capital. Third, Fed tightening is one of the conditions that has marked the peaks of past high-valuation, high-concentration bull markets.”

Evercore ISI: “The bull market remains intact with SPX set for 7,750 by YE, led by AI centric O/P-rated Info Tech, Comm Svcs, Cons Disc. Upside earnings surprises should catalyze share prices higher as positioning is cautious. “Beaten-Down Beat & Raisers” – underperformers with elevated short interest but strong fundamentals – are expected to outperform. NVDA, GOOGL, NFLX, BKNG among them. Conversely, “Darling Earnings Disappointers”—outperformers with weaker revisions/low beat rates—could underperform. Negative beta stocks remain attractive for offsetting portfolio volatility in a world increasingly tied to AI.”

Citi: “With geopolitical risks easing (until recently) and signs of rotation away from crowded AI trades, many of our conversations are returning to the likelihood of “broadening” performance in 2H26. The success of broadening relies on: (1) sustained cyclical improvement in macro/EPS revisions, and (2) a sustained pause in tech outperformance. On cyclical recovery, we are encouraged by upside surprises in economic data and more broad-based EPS upgrades. However, Tech continues to screen highly in our models, supported by standout earnings growth/momentum and attractive valuations. While AI volatility may remain elevated over the coming quarter, we maintain our overweight stance on global IT and the US with a medium-term view.”

Jefferies: “David Zervos remains bullish despite the rise in oil and the potential for rate hikes later in the year. Greed & fear seeing a sudden realization by investors that hyperscalers will not be able to make a return on their AI-related investments will trigger a sudden unwillingness to fund investments. Desh, seeing momentum now only driven by AI, could see an unwind on adverse sentiment. When Mo unwinds, prefer quality stocks with low momentum for summer.”

RBC Capital Markets: “There’s been no change to our 12-month price of 8,150, and the list of risk factors we’re monitoring is essentially unchanged. We said in our last Pulse report two weeks ago that the broadening trade probably had some room to run based on what we were seeing in our valuation work, but that we still thought of these as trades rather than longer-term shifts in leadership given better earnings dynamics for mega-cap growth and a lack of follow-through for the broadening on fund flows. Our valuation work isn’t yet sending a clear reversal signal. But given the sideways move in U.S./non-U.S. performance that has emerged, plus the return of growth/value, high price momentum/low price momentum, and top 10/rest of S&P 500 relative performance to levels close to past inflection points, we are on guard for a shift back into traditional mega-cap growth leadership.”