Good week last week. Nasdaq futures pointing higher to start this one. But the real tests are coming. Fed minutes Wednesday. Bank earnings next week. Valuations that are already stretched heading into all of it.
Nasdaq Futures Start the Week Higher
Nasdaq futures up 0.9% Monday morning. S&P 500 futures gained 0.3%. Dow futures added 0.1%. Positive start after a week that included a Dow record and a jobs report that surprised to the downside in a way markets actually liked.
S&P 500 is up about 20% over the past year. Nasdaq up more than 25% over the same period. Strongest quarter for Nasdaq in six years last quarter. Numbers that look good on paper but also raise a straightforward question heading into the second half. How much of the good news is already priced in.
Futures being up Monday does not tell you much on its own. Pre-market moves shift constantly. One headline between now and the open can change the direction entirely. Monday morning optimism and Friday close performance are often very different things.
Fed Minutes Wednesday
Before earnings season even starts the Fed drops meeting minutes Wednesday. These are the detailed notes from the June meeting where Kevin Warsh chaired his first FOMC session.
Market already knows rates stayed unchanged and that the dot plot turned more hawkish. What the minutes add is the texture of the conversation. How worried are officials about inflation. How close was the vote on different scenarios. What language did Warsh use internally that did not make it into the public statement.
Fed watchers will go through those minutes carefully. Any sign that a September hike is being actively discussed would move rate expectations and with that the dollar, bonds, and growth stocks. Any language suggesting the committee is more divided than it appeared publicly could also shift sentiment.
Earnings Season Starts July 13
Big banks go first as usual. JPMorgan, Goldman, others report the week of July 13. Bank results tend to set the early tone for the season because they reflect credit conditions, loan demand, and how businesses and consumers are actually behaving with money.
Analysts are forecasting roughly 25% earnings growth for S&P 500 companies. That is a high bar. High enough that even solid results might disappoint if they only meet expectations rather than beat them comfortably.
This is the tension at the start of every earnings season after a strong market run. Stocks have already moved up pricing in good results. Companies then have to deliver results good enough to justify prices that already assumed good results. Circular problem. Usually works out but the margin for error shrinks.
AI spending and data center buildout will be the main topic investors listen for on every call. Companies that can show AI investment translating into revenue and margin improvement will be rewarded. Companies that show more spending without clear returns will get questioned.
Global Markets Remain Mixed
Japan Nikkei slipped 0.7% Monday. Topix edged up 0.2%. South Korea Kospi dropped 1%. Mixed signals from Asia heading into a week with meaningful catalysts.
Yen is still sitting near 161.50 per dollar. Not far from the 40 year low it tested last week. Japanese authorities have been warning about intervention. Intervention has not happened yet but the language keeps getting louder. Any actual intervention move would cause a fast sharp swing in the pair and ripple into other currency markets.
S&P 500 Valuations Face Earnings Test
S&P 500 is trading at roughly 20 times forward earnings right now. Above historical average. Not at dot-com bubble levels and not at post-pandemic extremes but elevated enough that it matters.
Paying 20 times forward earnings means investors are betting heavily on that forward earnings number actually being right. If the 25% growth forecast comes in at 15% instead the math on current prices gets uncomfortable quickly.
Strong earnings season would justify current valuations and potentially push higher. Disappointing season with companies missing or cutting guidance would expose how much optimism is already built into prices. Either outcome is possible. That uncertainty is what makes the next few weeks genuinely important for where the market goes in the second half of 2026.