S&P Makes Weekly Advance As Inflation Reaches Lowest Level Since March 2021; Amazon, Microsoft, Alphabet And Major Banks Lead Market Optimism

The S&P 500 is closing the week in the green in light of positive inflation data.

The index was 2.48% higher on the week ahead of the market close Friday. Other major market indexes also showed an upward trajectory, with the Dow Jones rising 2.36% on the week.

The Nasdaq Composite is set for a whopping 3.36% weekly gain Google's parent company Alphabet GOOG GOOGL led gainers in the tech-dominated index. Shares of the search engine leader climbed this week after the company announced the launch of its AI search engine assistant Bard in Europe and Brazil.

Annual Consumer Price Index inflation in June was at its lowest level since March 2021, at 3%. The rate came below average economist estimates of 3.1% and marked a whole percentage point drop since May's 4%.

Producer Price Index inflation data was also welcomed positively by investors. The Thursday report showed that both PPI and core PPI (which strips out volatile food and energy prices) rose by only 0.1% in June, below the analyst consensus of 0.2%. 

The world of crypto was shaken this week after a U.S. judge determined the sale of XRP tokens by Ripple Labs did not constitute an offer of investment contracts, as the Securities and Exchanges Commission had alleged in a lawsuit against the company. The SEC said Ripple engaged in unregistered sales of XRP XRP/USD which the agency considers to be a security. This decision could set a precedent for other cryptocurrency companies facing similar legal challenges.

Positive earnings reports by some of the country's major banks Friday were the cherry on top that investors needed to close a hopeful week for the markets.

Shares of Wells Fargo WFC rose 1.7% this week as the company's earnings report revealed earnings per share for the second quarter of $1.25, beating the consensus of $1.15. Revenues reached $20.53 billion, up 21% year-over-year and also beating consensus estimates.

JP Morgan Chase JPM shares also rose on the heels of its second-quarter earnings. The bank's stock was up 3.25% on the week as management posted that net revenue was $42.4 billion, up 34.1% year-over-year, beating the consensus of $38.96 billion.

Citigroup C was the exception to the bunch. Its shares dropped on Friday after the company announced that its net income had dropped 36% in the second quarter. The stock was still positive on a weekly basis at the time of publication.

Microsoft MSFT shares rose after a federal judge ruled in favor of the company in a lawsuit filed by the Federal Trade Commision. The FTC, which argues that Microsoft's $69-billion acquisition of gaming giant Activision Blizzard ATVI will hurt fair competition across the video game industry, is appealing the decision.

Amazon AMZN stock surged after the company's two-day "Prime Day" event registered a 13% jump from last year's event, with day one marking the company's largest single sales day ever. Amazon saw sales of approximately $12.1 billion in gross merchandise value, accounting for more than 375 million items.

What To Watch: On Tuesday, the June retail sales report will show whether the positive macroeconomic news is being reflected in consumer spending across the country. Data from the real estate market will also add to the economic picture when June housing starts are released Wednesday the existing home sales report drops Thursday.

Major banks and financial institutions will continue to release earnings reports next week. Interactive Brokers IBKR will release its report on Monday. Bank of America BAC, Morgan Stanley MS and The Charles Schwab Corporation SCHW will report Tuesday. That day will also see earnings from defense giant Lockheed Martin Corp LMT and pharmaceutical colossus Novartis AG NVS.

Wednesday is earnings day for tech giants, with the release of reports from Tesla TSLA, Netflix NFLX, IBM IBM and semiconductor producer ASML Holding NV ASML. Goldman Sachs GS will also release earnings on that day. On Thursday, semiconductor leader Taiwan Semiconductor Manufacturing Company TSM will release its report along with Johnson and Johnson, Abbott Laboratories and software giant SAP SE SAP. American Express Company AXP will wrap up the finance-heavy earnings week on Friday.

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