With the majority of S&P 500 companies having posted quarterly results, investors’ focus will turn to inflation and consumer price index readings in the coming weeks. The three major indexes are on pace to end the week down, with the S&P 500 poised to post its worst performance since December. Despite the lost week, all three averages are still up for the year, underscoring the strength of the January rally. The weekly losses came despite Tuesday’s rally that sent the Dow Jones Industrial Average up 250 points and the Nasdaq Composite 1.9% higher than where they started the session on the back of Federal Reserve Chairman Jerome Powell’s latest comments. The Nasdaq is slated for the biggest weekly loss of the three benchmarks, down more than 2% on Friday afternoon. Sharp declined for Alphabet, which is off by more than 9% this week, dragging the tech-heavy index. .IXIC .SPX,.DJI 5D mountain Three major indexes In a conversation at The Economic Club of Washington, DC, Tuesday, Powell said that inflation has started to decline but still has a long way to go. That echoed comments he made the week before at a press conference that followed the announcement of the latest interest rate hike of 25 basis points. But Shana Sissel, the founder of Brion Capital Management, said the market fell in the following week as investors repositioned as they “digested” the pace of interest rate hikes, economic data and comments from Fed speakers. He cited last Friday’s employment data, which beat expectations and showed strength in the labor market, as one of the investors to consider. Furthermore, some said the market first suspected part of Powell’s comments in favor of the language around inflation began to decline, which he said bodes well for those who hope to avoid recession. “Investors only hear what they want to hear,” said Eric Sterner, chief investment officer at Apollon Wealth Management. “People just take … that Powell said ‘disinflationary’ and run with it. We don’t listen to the whole context.” Earnings season also continues to roll through the week, headlined by well-known consumer-focused companies such as Disney, Chipotle and PepsiCo. Disney is on pace to end the week down more than 2%. The decline comes despite Disney’s latest quarterly report, which showed a smaller-than-expected subscriber loss at the streaming service, along with earnings and revenue that beat analysts’ estimates. As of midday Friday, less than 70% of companies in the S&P 500 had reported earnings, according to FactSet. Of those companies, about 70% reported beating expectations, a smaller share than the three-year average calculated by The Earnings Scout. January consumer price index With Powell’s latest speech in the books, investors are now looking to the consumer price index for insight into the pace of inflation. The January reading for the index, which tracks prices of a broad basket of goods as a measure of inflation, is due Tuesday. Economists polled by Dow Jones estimated a 0.4% increase in the monthly CPI headline and a 6.2% gain from the previous year. Market watchers will be following the CPI reading as they see the Fed’s next move as being in line with inflation movements. “Next week is really all about one thing, and that one thing is the CPI,” said Scott Ladner, chief investment officer at Horizon Investments. “If it continues to show signs of disinflation, and continues to show signs of being under control or heading in the right direction, the Fed can allow growth to remain strong.” Hopes for a continued downward trend after December’s 0.1% monthly decline may be difficult, according to Vanguard senior economist Andrew Patterson, given the likelihood that shelter inflation will remain elevated. But Patterson said some indicators such as data from Zillow show the pace of housing costs may slow to the middle of 2023, while data in the service sector also show signs of cooling. The findings add to forecasts that inflation will end the year lower. While Patterson expects inflation to end the year below 3%, he said it may not approach the 2% mark – the Fed’s target – until late 2024. Investors will also be watching retail sales data for signs of weak consumer health. , said Sal Bruno, chief investment officer of IndexIQ. Economists predict that retail sales rose 1.7% in January, according to Dow Jones. “Retail sales and CPI are really driven by consumers, and a lot of them are looking at how consumers are doing,” Bruno said. “This could go a long way in trying to set the tone for the next week in terms of action based on these numbers.” The final leg of earnings season also continues next week, with companies such as Coca-Cola, Marriott, Cisco, Marathon and Paramount set to report. Next week’s calendar Monday Earnings: Arista Networks , Cadence Design Systems Tuesday Earnings: Leidos Holdings , PerkinElmer , Coca-Cola, Marriott International, Zoetis , Eversource Energy , Exelon , Howmet Aerospace , FirstEnergy , Ecolab , Akamai Technologies 6 am: NFIB Small Business Index [January] 8:30 am: consumer price index [January] 13:00: Philadelphia Fed President Patrick Harker speaks Wednesday Earnings: Biogen, Waters, Fidelity National Information Services, Westinghouse Air Brake Technologies, Kraft Heinz, Analog Technologies, Generac, Martin Marietta Materials, Devon Energy, Cisco Systems, Republic Services, Synopsys, Equinix 8:30: Empire State Index [February] 8:30 am: retail sales [January] 9:15 am: Industrial production [January] 10 am: Business inventory [December] 10 am: NAHB Housing Market Index [February] Thursday Earnings: Epam Systems, AIG, Hasbro, Organon, Paramount Global, Rollins, Zebra Technologies, Albemarle, American Water Works, LabCorp, Marathon Oil, Welltower, Constellation Energy, EQT, Henry Schein, Host Hotels & Resorts, Tyler Technologies, CF Industry, Entergy, Guest House, Pool, Vulcan Materials, Southern Co. , Applied Materials , Bio-Rad Laboratories , Digital Realty Trust 8:30 am: Home starts and building permits [January] 8:30: Jobless claims 8:30: Philadelphia Fed index [February] 8:30 am: producer price index [January] Friday Earnings: CenterPoint Energy , Deere , PPL 8:30 am: Import and export prices [January] 10 am ET: Key indicators [January]