Equity markets traded in a tight range on Monday as investors brace for the next PCE inflation report. The report is due on Friday and is not expected to give the Fed or the markets a reprieve. The index may cool at the headline level compared to last year, but the month-to-month figure is expected to accelerate to 0.4% and core inflation will remain steady at 4.6%. This may give the Fed room to pause but does not signal the need for rates to fall.

This week brings another round of earnings from the retail sector. Lowe's kicks it off this morning and may leave the market wanting more. Signals of shifting spending habits have cut into discretionary spending, and competitor Home Depot did not inspire confidence for 2023. As it is, the consensus estimates for 2023 earnings continue to deteriorate, which is a dead weight for the S&P 500.