Inflation Data and Earnings Season Collide as Fed Prepares for Next Move

The US stock market is gearing up for a busy week ahead of key inflation data releases and earnings from Cardinal Health. With second-quarter earnings season nearing its end, investors are shifting their focus to fresh US inflation readings that could shape Federal Reserve policy. Economists expect July headline CPI to rise 3.4% year over year and core CPI to increase 2.5%, with results announced on Wednesday.

Federal Reserve Governor Lisa Cook has signaled that inflation risks outweigh employment concerns, and is prepared to support a rate hike if necessary. This suggests that policymakers are looking beyond traditional backward-looking indicators as AI-related capital spending reshapes cost pressures across the economy.

Cardinal Health will report its fiscal 2026 Q4 results on Tuesday, with fiscal 2027 guidance critical as rivals Cencora and McKesson recently raised forecasts. The company has been expanding into higher-margin businesses such as specialty pharmaceuticals, direct-to-patient home delivery, and medical practice management services.