Equity markets could surge on Tuesday when the stock market reopens from the Memorial Day holiday. Powers in Washington, D.C., have struck a debt-ceiling deal and averted the risk of a US default. While good news, the real risk lies with inflation and interest rates, which are still rising. A rally in the stock market may be short-lived because of it, so investors should beware.

This weeks calendar brings another round of retail earnings and reports from AI-centric tech names like Ambarella. Ambarells is set to report earnings on Tuesday morning and could be the next AI stock to melt up. On the economic front, the monthly labor data is center stage and may move the markets on Friday. Job creation is important, but the bigger data may be the unemployment and wage inflation numbers.