U.S. markets enter a pivotal week, with investor attention turning toward major tech earnings and a high-stakes speech from Federal Reserve Chair Jerome Powell — both key factors that could shape the market’s near-term direction and sentiment.

Last week saw mixed performance across the major indexes. The Nasdaq climbed 1.5% to a record high, riding the continued momentum in tech stocks. The S&P 500 posted a modest 0.6% gain, while the Dow Jones slipped nearly 0.1%. It’s clear that investors are leaning toward growth-oriented sectors, particularly big tech, while more traditional spaces like industrials and financials lagged.

This week, several high-profile companies will report second-quarter results, with Alphabet (Google’s parent company) and Tesla leading the charge on Wednesday after the bell. Wall Street will be watching closely for updates on their AI and EV strategies — two of the most closely watched narratives of the year. Earnings season continues with heavyweights like Verizon, Texas Instruments, Coca-Cola, IBM, AT&T, Intel, and Honeywell also on deck.

According to FactSet, analysts expect S&P 500 companies to post a 4.8% year-over-year earnings increase for Q2 — potentially the slowest pace since Q4 of last year. While still positive, this slowdown could pressure valuations, especially for stocks that have rallied strongly in anticipation of stronger growth.

One of the most anticipated events this week isn’t an earnings report — it’s Fed Chair Powell’s remarks on Tuesday. With the Federal Open Market Committee’s next meeting set for the end of July, markets will pore over his comments for any clues related to inflation and future rate cuts.

Recent data is already shifting expectations. June’s Consumer Price Index (CPI) rose just 2.7% year-over-year, below market forecasts. Meanwhile, hiring data shows signs of normalization. Some Fed officials have hinted at support for a rate cut this month — with markets now widely expecting the Fed to lower the federal funds rate to 4.7%, potentially marking the first rate cut of the year.

Besides earnings and Fed commentary, a string of U.S. economic data releases will offer further insights into the health of the economy. June’s new and existing home sales, durable goods orders, and the preliminary July PMI readings for manufacturing, services, and the overall economy could influence both sentiment and policy direction.

Across the Atlantic, the European Central Bank is also meeting this week, with a rate decision set for Thursday. While no change is expected, markets will be watching for updated views on inflation and where the ECB stands amid a broader shift in global central bank policy.

In short, this week delivers a heavy dose of information that could steer markets in a big way — from key earnings to central bank signals. For investors, staying nimble and alert to fresh developments will be essential in navigating what may be a defining week for the second half of the year.