U.S. Stock Market Outlook: Inflation Data, Shutdown Risks, and Oracle Earnings This Week

Key Economic Events and Corporate Results to Watch

The U.S. stock market faces a pivotal week as investors grapple with ongoing uncertainties surrounding government tariff policies and fears of an economic slowdown. This period brings critical economic releases, including the Consumer Price Index (CPI) report, alongside the looming deadline for federal budget negotiations that could trigger a government shutdown. Adding to the mix, major corporate earnings from Oracle and other key players are set to influence market sentiment. Last week, stocks stumbled under the weight of tariff-related ambiguity from the Trump administration and recession concerns, with the Dow Jones Industrial Average dropping 2.4 percent, the S&P 500 sliding 3.1 percent, and the Nasdaq Composite plunging 3.5 percent. A modest rebound on the final trading day offered some relief, with the Dow gaining 0.5 percent, the S&P 500 rising 0.6 percent, and the Nasdaq climbing 0.7 percent, signaling a potential pause in panic selling. However, the coming days promise heightened volatility as multiple high-stakes events unfold.

This week’s spotlight falls on the February CPI release scheduled for March 12, a key indicator of inflation trends that could shape expectations for Federal Reserve interest rate decisions. Economists surveyed by FactSet anticipate a month-over-month CPI increase of 0.3 percent, down from January’s 0.5 percent, with a year-over-year rise of 2.9 percent compared to January’s 3.0 percent. Core CPI, excluding volatile food and energy prices, is expected to grow by 0.3 percent month-over-month, easing from January’s 0.4 percent, while the annual core CPI rate may dip to 3.2 percent from 3.3 percent. Following closely on March 13, the Producer Price Index (PPI) report is projected to show a month-over-month uptick of 0.3 percent, down from January’s 0.4 percent, with a year-over-year increase of 3.1 percent versus January’s 3.5 percent. Core PPI, a measure of wholesale inflation, is likely to hold steady at 0.3 percent month-over-month, with its annual rate slipping to 3.5 percent from 3.6 percent. These inflation figures arrive ahead of the Federal Open Market Committee (FOMC) meeting on March 18 and 19, where interest rates are expected to remain unchanged, with a 90 percent probability according to CME Group’s FedWatch tool. Traders still foresee one or two 0.25 percent rate cuts in the first half of 2025, but stronger-than-expected inflation data could delay those expectations, pressuring stock valuations further. Conversely, softer numbers might bolster hopes for monetary easing, offering a lift to equities.

Compounding market unease is the March 14 deadline for federal budget approval, a make-or-break moment that could lead to a government shutdown if Congress fails to act. Despite Republican control of the White House and both chambers of Congress, passing a budget requires bipartisan support in the Senate, where at least seven Democratic votes are needed to overcome a filibuster. President Trump has floated a temporary funding plan to extend government operations through September, but as of now, no agreement has materialized. A shutdown would halt paychecks for federal workers and paralyze government functions, injecting fresh uncertainty into an already jittery market. Michael Arone, chief investment strategist at State Street Advisors, told MarketWatch that the real concern lies not just in the shutdown’s immediate effects but in whether Republicans and Democrats can demonstrate a capacity for compromise. He described the budget talks as a litmus test for bipartisan cooperation, noting that heated debates are already stoking market volatility. Investors are also keeping an eye on related economic indicators this week, including the January Job Openings and Labor Turnover Survey (JOLTS) on March 11, which tracks labor demand, and the preliminary March University of Michigan Consumer Sentiment Index on March 14, a gauge of consumer confidence that recently flagged rising inflation expectations amid stalling economic growth, fueling stagflation worries.

Corporate earnings add another layer of intrigue, with Oracle set to unveil its fiscal third-quarter results after the market closes on March 10. Analysts expect earnings per share (EPS) of $1.48, spotlighting the cloud computing giant’s role in the artificial intelligence (AI) boom. Adobe follows on March 12 with its fiscal first-quarter earnings, projected at $4.97 per share, as investors assess the strength of its AI-driven editing software amid a tech sector sell-off. On March 13, discount retailer Dollar General is anticipated to report $1.50 per share for its fiscal fourth quarter, while beauty retailer Ulta Beauty is expected to post around $6.50 per share for its fiscal fourth quarter, offering insights into consumer spending resilience. Recent trends show AI-related stocks like Nvidia and Marvell Technology facing sharp declines despite solid earnings, as lofty valuations and economic slowdown fears trigger sell-offs. Oracle and Adobe’s results could either reinforce this pattern or spark a tech rebound, while Dollar General and Ulta Beauty’s performance will shed light on whether cost-conscious shoppers are tightening their belts.

Reflecting on last week’s labor market data provides additional context for this week’s events. The February jobs report, released on March 7, showed nonfarm payrolls growing by 151,000, below the consensus estimate of 160,000, with the unemployment rate ticking up to 4.1 percent from January’s 4.0 percent. While the figures disappointed slightly, they did not signal a drastic cooling of the labor market, reducing pressure on the Fed to rush into rate cuts. Still, persistent tariff threats from the Trump administration could reignite inflation pressures if import costs rise, a scenario some companies are already preparing for by adjusting prices. This dynamic underscores the delicate balance investors must navigate: slowing growth versus sticky inflation, with potential policy missteps or political gridlock amplifying risks. For those tracking U.S. stock market trends in March 2025, this week offers a wealth of data points, from CPI inflation forecasts to government shutdown updates and corporate earnings surprises, each carrying the power to sway indices and reshape investor strategies. Staying informed on these developments will be crucial for understanding where equities might head next.