On the heels of a strong employment report, Wall Street was looking ahead to big company earnings reports and key inflation data.
The futures tied to the industrial average fell. The S&P 500 futures fell in pre-market trading.
The S&P finished the day slightly lower, while the index rose for five straight days. The economic downturn that investors are worried about has not yet arrived and added to positive sentiment after the stronger-than- expected jobs report Friday.
The 2-year Treasury yield held above the 10-year yield, which is seen as a recession indicator.
"While the markets ended in solid green for the week, investors should brace for continued volatility in July, with ongoing uncertainties looming with respect to inflation, Fed policy, recession concerns, the enduring Russia-Ukraine war, all as we also move into corporate earnings season."
While the jobs report is good for the economy, it could embolden the Federal Reserve to continue hiking rates. This week will see a lot of earnings from major banks and consumer inflation data.
Bassuk said that investors are hyper-focused on corporate earnings for greater clues about the health of corporate America and the U.S. economy.
A strong second quarter might be accompanied by very conservative outlooks, as a sharper lens will need to be used to scrutinize these earnings reports. As commodity and other producer costs remain high, companies will be looking at the extent to which those heightened prices can be passed on to consumers and how to keep earnings vigorous.
On Tuesday and Wednesday, Delta Air lines will report earnings. At the end of the week, Citigroup, Morgan Stanley, Wells Fargo and JP Morgan Chase are expected to report.
Inflation data this week is important for investors. Headline inflation, including food and energy, is expected to rise above May's 8.6% level in the June consumer price index.
Bassuk said that investors expect more aggressive Fed rate hike actions if the inflation data shows an outsized reduction in prices.
The University of Michigan will release their consumer sentiment report for July on Friday.
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