US Stocks Set for Rebound as Investors Await Key Inflation Data

US stocks are set for a rebound as investors eagerly await the release of the June PCE index, the Fed's preferred inflation indicator. This data will influence expectations for rate cuts and test Wall Street's confidence in a September pivot.

The recent sell-off in tech stocks, driven by underwhelming earnings from Big Tech companies, has caused the Nasdaq Composite and S&P 500 to suffer, prompting investors to move from megacaps to smaller cap stocks. However, with easing inflation data and expectations of future rate cuts, US stocks have risen, with the Dow, S&P, and Nasdaq all climbing.

Investors are also preparing for quarterly earnings reports from tech giants Apple, Microsoft, Amazon, and Meta next week. The market is currently contemplating whether the recent sell-off is indicative of sustained lower prices or just a typical bull-market pullback.