Investors are heading into a shortened U.S. trading week with a packed agenda. A slate of economic reports — spanning inflation and growth — will command attention, alongside minutes from the Federal Reserve’s latest meeting. On the corporate front, results from Walmart (NYSE:WMT) and Palo Alto Networks (NASDAQ:PANW) are set to draw particular scrutiny.
1. PCE inflation data
Inflation figures will remain central to market sentiment, with the monthly personal consumption expenditures (PCE) price index among the most closely watched releases.
Economists expect the core PCE measure — the Federal Reserve’s preferred inflation gauge — to rise 0.3% month over month in December, up from 0.2% in November. On an annual basis, the Bureau of Economic Analysis is projected to report a reading of 3.0%, compared with 2.8% previously.
Recent data showed that headline consumer price inflation in January increased at a slower pace than anticipated, reinforcing expectations that the Fed could begin cutting rates as early as June. That followed a surprisingly strong labor market report earlier in the week, which had fueled speculation that policymakers might delay further easing until the latter half of the year after multiple rate cuts in 2025.
2. GDP update
Markets will also digest a preliminary estimate of fourth-quarter U.S. economic growth, which is expected to show a cooling from the prior quarter.
Analysts forecast that gross domestic product expanded at a 2.8% quarter-on-quarter annualized rate between October and December, easing from 4.4% growth in the third quarter.
In the July-to-September period, consumer spending — a long-standing pillar of U.S. economic activity — remained a key driver. A narrowing trade deficit, partly linked to President Trump’s sweeping tariff measures, also supported expansion.
Despite the headline strength, some analysts have described the recovery as “K”-shaped, arguing that wealthier households and large corporations have powered much of the growth. Lower-income Americans continue to grapple with high prices and softer hiring conditions, while small businesses face rising import costs and tighter labor supply tied to stricter immigration enforcement.
Artificial intelligence is another looming factor. The rollout of new AI tools in recent weeks has unsettled shares across multiple sectors, underscoring investor concerns about potential disruption from the rapidly evolving technology.
3. Federal Reserve minutes
Against this backdrop, the Fed opted to keep its benchmark interest rate unchanged at its January meeting.
Policymakers cited a stabilizing labor market and inflation that remains above target but steady as justification for maintaining rates within a 3.5% to 3.75% range.
Officials are widely expected to hold at that level in the near term, adopting a cautious stance as they monitor developments in employment and price trends.
Minutes from the meeting, due Wednesday, may offer additional clues about the central bank’s thinking. Notably, Governors Stephen Miran and Christopher Waller dissented from the decision to pause the rate-cutting cycle that began in mid-2025.
Meanwhile, Fed Chair Jerome Powell is approaching the end of his term, which expires in May. President Trump has nominated former Fed Governor Kevin Warsh as his successor, prompting investors to assess how Warsh’s approach to monetary policy could differ from Powell’s.
4. Walmart earnings
Retail heavyweight Walmart will headline this week’s earnings calendar.
The company’s shares have surged this year, lifting its market value above $1 trillion and cementing its position as the largest company in the consumer staples space.
Given the central role of household spending in the U.S. economy, Walmart’s results — particularly during the critical holiday shopping season — may provide insight into consumer health. Its focus on value pricing for essentials could offer additional perspective on how shoppers are navigating ongoing economic pressures.
The report may also set the tone ahead of earnings from peers such as Home Depot and Target in the weeks to come.
5. Palo Alto Networks results
Palo Alto Networks will report after U.S. markets close on Tuesday, offering a fresh read on technology firms contending with intensifying competition from emerging AI models.
The cybersecurity group raised its full-year revenue and profit outlook in November, citing strong demand for its digital security solutions amid escalating cyber threats.
The company also announced a $3.35 billion acquisition of cloud management and monitoring firm Chronosphere, with plans to integrate it into its Cortex AgentiX platform. The move would enable Palo Alto’s AI agents to leverage Chronosphere’s data to identify performance issues and pinpoint root causes.
Alongside a separate agreement to acquire identity security specialist CyberArk Software, the Chronosphere deal is expected to close in the second half of Palo Alto’s fiscal 2026.