Stocks slipped slightly and bond yields climbed as hopes for quick interest rate cuts from the Federal Reserve cooled down. The excitement that had been driving markets toward record highs lost momentum, with investors now turning their attention to a key inflation report due later this week.

Federal Reserve Chair Jerome Powell suggested on Friday that the central bank might be ready to cut rates as early as September, especially with signs of a weakening job market. However, Wall Street remains unsure about how fast or aggressive those rate cuts will be. Fed officials are still divided, and traders are bracing for a possibly hot inflation number this Friday.

The Fed’s preferred inflation measure — the core personal consumption expenditures (PCE) index, which excludes food and energy prices — likely increased by 2.9% in July compared to a year ago. If confirmed, this would mark the highest annual rate in five months, showing that inflation is still a concern even as jobs data weakens.

“Powell gave the market a boost with his comments, but now the focus is shifting to how far and how fast the Fed might actually go with rate cuts,” said Chris Larkin of E*Trade. He added that slowing job growth seems to be a bigger worry than inflation right now, but the Fed is still aiming for its 2% inflation goal.

Markets reacted cautiously. The S&P 500 dipped 0.2%, while 10-year Treasury yields rose three basis points to 4.28%. The Bloomberg Dollar Spot Index remained stable, showing no major movement in currency markets.

Investors are also watching Nvidia closely. The tech giant will release its quarterly earnings report on Wednesday after markets close. This is expected to be a major test for the recent AI-driven stock rally. Traders hope Nvidia’s results and outlook will confirm that this boom in artificial intelligence investment is more than just hype.

Matt Maley from Miller Tabak said Nvidia’s report is likely the most important event of the week — unless something completely unexpected happens. He believes it’s unlikely that Nvidia will disappoint, but reminded investors that even strong earnings last year led to a “sell the news” drop in the stock price.

In company news:

– Furniture stocks like Wayfair and RH dropped after Donald Trump announced a new tariff investigation targeting furniture imports into the U.S., raising concerns about future import taxes on the sector.
– Keurig Dr Pepper plans to acquire coffee company JDE Peet’s for about $18.4 billion as part of a strategy to improve its struggling coffee segment before splitting off parts of its business.
– Crescent Energy will buy fellow Texas-based shale producer Vital Energy for $733 million, continuing consolidation in the U.S. oil sector.
– Crypto firms Galaxy Digital, Multicoin Capital, and Jump Crypto are in talks to raise around $1 billion to invest in Solana, a major cryptocurrency — marking one of the biggest token-focused fund efforts ever.
– Trading app Webull is reintroducing crypto trading in the U.S., after dropping it during its previous attempt to go public in 2023.
– Offshore wind developer Orsted saw its shares fall after the Trump administration blocked construction of a nearly completed wind farm, threatening a planned $9.4 billion share offering backed by the Danish government.
– PDD Holdings reported stronger-than-expected earnings thanks to new stimulus efforts by China’s government to boost consumer spending and counteract effects from U.S. tariffs.

Here’s how major markets looked:

**Stocks**
– S&P 500: down 0.2%
– Nasdaq 100: down 0.3%
– Dow Jones: down 0.2%
– Europe’s Stoxx 600: flat
– MSCI World Index: down 0.2%

**Currencies**
– US Dollar: steady
– Euro: down 0.1% to $1.1703
– British Pound: down 0.1% to $1.3507
– Japanese Yen: down 0.4% to 147.49 per dollar

**Cryptocurrencies**
– Bitcoin: fell 1.3% to $111,262
– Ether: fell 2.9% to $4,646

**Bonds**
– 10-year US Treasury yield: up to 4.28%
– German 10-year yield: up to 2.78%
– UK 10-year yield: down to 4.69%
– 2-year US Treasury yield: up to 3.73%
– 30-year US Treasury yield: up to 4.90%

**Commodities**
– Crude Oil (WTI): up 1.2% to $64.40 per barrel
– Gold: down 0.1% to $3,366.85 per ounce

Investors should prepare for potential market shifts this week driven by both economic data and key corporate earnings, especially from tech leaders like Nvidia. Inflation trends and Fed policy direction remain at the heart of market uncertainty as summer winds down.