What are the highlights of the last trading week of the first half of the year? The inflation data most closely watched by the Federal Reserve is about to strike

Smart Finance APP noticed that in the last trading week of this month, this quarter, and the first half of 2024, investors will face crucial inflation data, sporadic corporate earnings, and another period of market consensus-breaking described in superlatives.

On Friday, investors will see the data for the Personal Consumption Expenditures (PCE) Price Index for May, which is the inflation measure favored by the Federal Reserve. The index is expected to show a 0.1% month-on-month increase in prices on a "core" basis (excluding food and energy), the slowest monthly gain since November last year.

On an annualized basis, the core PCE inflation rate is expected to rise by 2.6%, the lowest level since March 2021.

Earlier this month, the Consumer Price Index (CPI) showed a continued cooling of inflation, supporting investors' bets that the Fed will cut interest rates later this year. The Fed's projections released on June 12th indicate that the central bank expects to cut rates at least once in 2024.

Earnings reports this week will remain calm, with FedEx (FDX.US) on Tuesday, Micron (MU.US) on Wednesday, and Nike (NKE.US) on Thursday being the highlights.

Micron's report will be closely watched for signs of how strong the demand is for its entire product portfolio in artificial intelligence. Nike's report comes at a critical moment for the retailer. The company's stock has fallen 11% this year as it struggles to fend off competition in the core athletic shoe market from Adidas and relative newcomers like On Holding (ONON.US) and Deckers Outdoor's Hoka brand.

Outside of market trading hours, some investors' attention may also be focused on the presidential debate between President Biden and former President Trump on Thursday night, the first of two scheduled debates between the two presumed candidates.

AI Continues to Outperform the Market

Last year, AI trading dominated the market. The S&P 500 rose over 22%, and the Nasdaq rose nearly 40%.

Entering 2024, one of Wall Street's most popular views is that this rally will broaden, bringing in lagging industries that were overlooked in last year's "AI Everything" surge.

However, in the first few months of 2024, the situation has hardly changed.

The performance gap between the S&P 500 and the Nasdaq has narrowed - the S&P 500 is up over 14% this year, while the Nasdaq is up over 17% - but the Dow Jones Industrial Average is still lagging, up only 3.8% year-to-date.

Meanwhile, companies related to AI such as NVIDIA (NVDA.US), Super Micro Computer (SMCI.US), Broadcom (AVGO.US), and the aforementioned Micron have been among the best-performing companies in the S&P 500 so far this year. Energy companies related to AI like Vistra (VST.US) and Constellation (CEG.US) have also been among the top performers in the index this yearJohn Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management, wrote: "The rebound in the first half of this year demonstrates the value of 'staying the course.'"

"In our view, the sharp reversal in bond yields towards the end of 2023 and the subsequent market rebound highlight the importance of investor patience and sticking to diversified investment portfolio allocations. Despite signs of an economic slowdown, the stock market continued to rise in the second quarter. The rebound in the stock market from the fourth quarter of last year has persisted into the first half of this year, underscoring the necessity of maintaining investments."