Hey there! Happy Monday from The Street Sheet. Ready to start a new week of trading off strong? Here’s everything you might have missed last week on Wall Street, and everything to watch in the week ahead.

Markets shrugged off sweeping new tariffs and continuing signs of weakness in the labor market this week, with all three major indices rising. The Nasdaq rose 3.87%, closing at another all-time high, while the S&P 500 rose 2.43%, a whisker away from a previous all-time high, and the Dow Jones finished the week up 1.35%.

Last week, after July’s jobs report showed a meager 73,000 jobs created for the month, well below analysts’ expectations, we wrote that this week’s initial jobless claims data would be an important tea leaf to consider, as we watch for more signs of cracks in the labor market.

On Thursday, we saw such a sign, as initial jobless claims for the week prior showed an increase in new claims, with 226,000 people filing for unemployment insurance for the first time. The week before, the number had been 219,000.

Meanwhile, the Institute for Supply Management’s (ISM) manufacturing survey results came in on Tuesday, showing the headline index below 50 for the fifth month in a row. Its employment index reading of 43.4, the lowest since the beginning of pandemic lockdowns, is a sign of contraction in domestic manufacturing activity.

But the news wasn’t all grim, with Thursday’s report on US labor productivity in the nonfarm business sector showing productivity rising by 2.4% in Q2. It’s the biggest jump in quarterly productivity growth since 2021. And the final S&P Global US Services report for July showed a reading of 55.7, up from 52.9 in June, showing a strong expansion in the sector.

The week ahead will bring on a raft of inflation data, with the Consumer Price Index (CPI) reading for July, and Core CPI, which excludes food and energy, being released on Tuesday. The Producer Price Index (PPI) is scheduled for Thursday, and will give insight into the inflationary pressures that producers are facing. 

In June, the core CPI reading showed 0.2% inflation month-over-month, and 2.9% year-over-year, well above the Fed’s 2% target. Fed Chair Jerome Powell cited stubborn inflation in his July 30 remarks explaining his decision to keep interest rates steady; with two Fed officials scheduled to speak this week after the Fed’s preferred gauge, Core CPI, is released, we’ll be watching to see if they’re maintaining their hawkish stances on inflation and interest rates. 

Also coming Thursday are the initial jobless claims numbers for the week prior, and we’ll be watching to see if the uptick in filings continues. An increase from the 226,000 initial jobless claims filed last week would add to the growing pile of evidence that labor market conditions have not “remained solid” contrary to Fed Chair Powell’s July 30 remarks, and will increase pressure on the Fed to cut rates.

Friday will shed light on how consumers are feeling, first with retail sales for July and then a preliminary consumer sentiment report. Last month, the 0.6% growth in retail sales in June was seen as a bright spot, and analysts are forecasting similar growth for July. Underwhelming numbers in these reports could add to recent feelings of malaise, in a sign that weaker jobs numbers are rocking consumer confidence.