Wall Street week ahead! US markets eyes volatility: Tesla, Netflix earnings & delayed CPI report in focus

Wall Street week ahead: US stock markets are showing signs of shakiness as investors prepare for a week packed with corporate earnings and delayed inflation data. According to a Reuters report, major companies such as Tesla and Netflix are expected to provide a clearer picture of corporate profits, while the delayed September Consumer Price Index (CPI) will test market resilience.The fourth year of the S&P 500’s bull run began with notable swings after a long period of calm, driven by renewed US -China trade tensions and credit concerns at regional US banks. The CBOE market volatility index (VIX), known as Wall Street’s “fear gauge,” surged to its highest level in nearly six months on Friday.“The market is becoming more volatile, but it’s also coming off of a very non-volatile period where we didn’t have a lot of risk catalysts bubbling to the top,” Michael Reynolds, VP of investment strategy at Glenmede told Reuters.“Once you have valuations hit sort of full levels, as we’re seeing now almost across the board, you have to be on the lookout for incremental risk catalysts,” Reynolds added.The immediate trigger for volatility was a resurgence in US-China trade tensions. Stocks dropped last week after the US threatened to significantly hike tariffs by November 1 over China’s rare-earth export controls. President Donald Trump confirmed he will meet Chinese President Xi Jinping in South Korea in two weeks, keeping markets on alert.Credit worries at regional US banks also contributed to market jitters. While major indexes posted weekly gains, underlying trends point to cracks. According to Adam Turnquist, chief technical strategist at LPL Financial, the percentage of S&P 500 stocks in an uptrend has dropped from 77% in early July to 57%, while downtrends have increased from 23% to 44%. “That narrowing gap highlights emerging cracks in the market’s foundation,” he said.“If you have a fewer number of companies that are actually moving higher, but the indexes do move higher because of the megacaps, that’s a really important divergence,” Kevin Gordon, senior investment strategist at Charles Schwab, emphasised the importance of breadth in market gains, told Reuters.Investors will closely watch third-quarter earnings, with reports from companies including Procter & Gamble, Coca-Cola, and major tech and aerospace firms, alongside Tesla and Netflix. With the US government shutdown halting economic data releases since October 1, corporate reports offer the best insight into broader economic health. “Corporate reports and what companies say is really our best chance at assessing what the broader economic health is,” Gordon added.The delayed CPI report, set for release on Friday, comes just days before the Federal Reserve’s October 28-29 meeting, where a quarter-point rate cut is widely anticipated.“We’d really have to see something out of left field in terms of notable inflation pressures to knock the Fed off of a rate cut path at the October meeting,” Reynolds added.