As trading resumes, investors are zeroing in on significant developments: President Trump’s new tariffs, essential inflation data, and Federal Reserve Chair Jerome Powell’s testimony to Congress.

1. Trump’s Tariffs and Trade Tensions

New 25% tariffs on steel and aluminum imports are coming, with reciprocal duties being discussed. Notably, Trump’s recent 10% tariffs on Chinese goods could trigger retaliatory measures from Beijing.

Market Impacts: Anticipated higher costs for U S manufacturers could add to inflationary pressures and boost market volatility.

2. Upcoming CPI Inflation Data on Wednesday

The Consumer Price Index (CPI) report is expected to show a slight cooling of inflation, with core inflation expected to edge up. Month-on-month CPI might indicate higher inflation than the previous period.

Market Impacts: Persistent inflation could encourage the Fed to reconsider delaying rate cuts, but a lower than expected CPI could boost equities markets.

3. Key Testimony from Powell

In his address to Congress, Powell will provide insights concerning the CPI report and broader monetary policy. Comments regarding tariffs and debt levels will also be scrutinized.

Market Impacts: A dovish tone might spark a rally, while a hawkish stance could elevate volatility levels.

4. Ongoing Earnings Season

With over half of S&P 500 companies having reported Q4 results, focus shifts to upcoming earnings for brands like McDonald’s, Coca-Cola, and Cisco Systems. Nvidia’s earnings are expected to serve as a pivotal market catalyst.

5. Record Highs in Gold

Spot gold has climbed to $2,899.26 per ounce, driving demand for safe-haven assets against the backdrop of tariffs and inflation worries.

Market Impacts: Rising inflation alongside rate uncertainty could bolster gold prices, while strong dollar and yield rises could trigger correction risks.

Final Thoughts

As CPI inflation data, Powell’s testimony, and corporate earnings approach, volatility is expected to stir in the markets. Investors will be monitoring sentiments surrounding tariffs and gold prices closely as they weigh reinforcement for asset allocations.