AI Jitters and a Key Jobs Report: What Investors Must Watch This Week

After a roller-coaster week in the markets, thanks to flip-flopping sentiment about AI spending, investors will get plenty more action on the calendar as we enter jobs week. The June jobs report on Thursday (not Friday!) will shape the week, but a suite of jobs data (job openings, ADP private payrolls, and layoff plans) will make for a steady drumbeat of economic data, along with a consumer sentiment check and economic activity data from S&P Global and ISM.

Key events this week:

• June jobs report (Thursday): Expected to show 123,000 jobs added, according to Bloomberg.
• Nike earnings (Tuesday): A big report on a slim earnings calendar.
• Consumer sentiment data: Rebounding sentiment could signal potential demand.

AI trade uncertainty: Memory chipmaker stocks yo-yoed last week after Micron's earnings. Reports that OpenAI is delaying its IPO add worry. However, AI demand may finally be justifying the massive costs of data center infrastructure, according to a report from Exponential View cited by Bloomberg.

Market performance: The S&P 500 and Dow finished 0.1% down, while the Nasdaq fell 0.2% on Friday.

Labor market context: Labor market vibes may be bad due to tough hiring conditions and AI-driven pauses, but the actual data has been fine for the Federal Reserve. A warming labor market could signal inflation danger and cement a hawkish Fed.

Stay tuned for a week full of economic data and earnings that will test the market's direction.