Equity markets tread water on Monday as investors weighed a fresh round of earnings reports and prepared for another inflation report. On the earnings front, reports continue to come in better than expected, but instead of pointing to a solid rebound in the 2nd half inflationary pressures persist and volume declines are taking a toll on the outlook. If this trend continues, it is likely the S&P 500 will move lower by the end of the reporting session but it is still early in the cycle.

The PCE price index is due out on Friday. This is the last read on inflation before the next FOMC meeting and will set the tone for the upcoming decision. If inflation shows cooling the FOMC may be able to hike once more and then pause to wait and see what happens. If not, the Fed may be forced to hike more than expected and there us still the oil price to consider. The price of oil is expected to move higher due to OPEC's production cuts and that may reinvigorate inflation.