A delayed jobs report and fresh inflation data will dominate markets this week

• The market narrative will be dominated by the November jobs and inflation data this week.
• The job market has been a key focus for investors as they gauge the outlook for more rate cuts.
• A lineup of Fed speakers this week could also influence the market's expectations for rates in 2026.

Markets are expecting key updates this week that could inform the trajectory of stocks through year-end and into 2026.

US stocks gained to start the week as investors looked ahead to a heavy schedule of economic data and Fedspeak. The biggest updates will be November jobs and inflation data, two of the biggest focuses for investors in recent months as they try to chart the path for Fed rate cuts heading into the new year.

Major indexes were volatile as Monday trading kicked off, edging higher before giving up some gains.

Here's where US indexes stood around 9:30 a.m. opening bell on Wednesday:

• S&P 500: 6,832.75, up 0.08%
• Dow Jones Industrial Average: 48,478.57 up 0.04% (+20.52 points)
• Nasdaq composite: 23,142, down 0.23%

Here's a run-down of the economic data investors will be getting this week:

• November jobs report (Tuesday): Expected 50,000 payrolls.
• Initial jobless claims (Thursday): Expected 223,000 initial claims.
• November inflation report (Thursday): Expected 3.1% year-over-year growth in headline inflation and 3.0% growth in core inflation.
• Consumer sentiment (Friday): Expected reading of 53.8.

The strength of the job market has been front and center for the Fed, which cut rates another 25 basis-points last week and suggested that it would focus its efforts on supporting the labor market as opposed to keeping a lid on inflation.

This jobs report is expected to come into particular focus, given that the November data was delayed due to the government shutdown.

The market looks to be in a "bad is good regime," analysts at Morgan Stanley wrote in a note on Monday, referring to how weak jobs data can be bullish for stocks as it tees up expectations for more monetary policy easing.

"This week's jobs data could be more important for equities' perception of interest rate policy going forward than last week's FOMC meeting," the bank wrote. "This implies that moderate labor market weakness is likely to be viewed in a bullish context by equity markets."

Thursday's inflation report could also feed into rate-cut expectations.

"Thursday's delayed CPI report provides a much needed update on how inflation has fared in recent months. The market is still hungry for inflation data even as it appears that the Fed is more focused on the labor market at this time," Rick Gardner, the CIO at RGA Investments, wrote in a note on Monday.

The economic releases will be supplemented by a lineup of Fed speakers this week, who are expected to provide insight into the path of monetary policy heading into next year. Here's the list of central bankers:

• Monday

  • Fed Gov. Stephen Miran
  • New York Fed President John Williams

• Wednesday

  • Fed Gov. Chris Waller
  • New York Fed President John Williams
  • Atlanta Fed President Raphael Bostic

Investors think a rate cut is certain at the Fed's January policy meeting, and are pricing in a 26% probability that the central bank could issue a jumbo-sized 50 basis-point rate cut that month, according to the CME FedWatch tool.

Still, stocks have been struggling to move meaningfully higher after a rough performance in November. The tech sector remains under pressure as investors assess high valuations and fret over a potential AI bubble.

"Friday's selloff suggests that investors are taking some profits in tech stocks and reallocating money into value-oriented stocks. This rotation is not surprising, especially as we head into year-end," RGA's Gardner added.