The stock market will have to get through a big week of economic data ahead, as it undergoes a major rotation that could drive the market toward a year-end rally. The week ahead is stacked with big reports — including jobs and inflation data — that have been delayed because of the government shutdown. November nonfarm payrolls, originally scheduled for release at the start of the month, is instead due out on Tuesday, Dec. 16, as are October retail sales, followed by the November consumer price index on Thursday, Dec. 18. Wall Street expects that the data will confirm what investors have already suspected in recent months: Weaker jobs growth in a “no hire, no fire” environment, and sticky inflation that still has a ways to go to reach the Federal Reserve’s 2% target — both pointing to a sluggish economy. Still, if the reports comes in as expected, or better yet if there’s a positive surprise, they could open the door for buyers just ahead of the holidays. “If we get data that’s in line, I think this market, it will continue to rally into year end,” said Jay Woods, chief market strategist at Freedom Capital Markets. “If we get a positive surprise on either [nonfarm payrolls or CPI], the rally could pick up some steam, and those S & P 7,000 hats could be seen on some of the brokers on the floor and the stock exchange.” Weaker jobs, higher inflation Of course, any surprises in next week’s releases will have to be taken with a grain of salt, given that the delays in data collection could mean the numbers are incomplete or have other distortions. (October’s payrolls data, for example, is set to be included in the November release, though there won’t be an unemployment rate for the month). November’s nonfarm payrolls is forecast to show the U.S. added 40,000 jobs last month, according to consensus estimates on FactSet. That’s far below the 119,000 jobs added in the September payrolls release, the first big jobs report after the government reopened. Yet, alternative data sets investors turned to during the data blackout hint at a jobs market that could be worse than feared. On Wednesday, Fed Chief Jerome Powell said that there likely has been negative job growth in recent months, due to “a systematic overcount,” suggesting big downside revisions coming in the data. At the same time, November’s consumer price index is expected to show headline inflation rose last month to 3.1% on a year-over-year basis, according to FactSet consensus estimates. Core inflation, which excludes food and energy, is expected to also come in at 3.1%. Both reports, one showing weaker jobs growth and the other sticky but stable inflation, could support easier monetary policy. While Fed policymakers are penciling in just one quarter point cut in 2026, the market is pricing in two reductions, according to the CME FedWatch tool . Conversely, a major surprise in either jobs or inflation could hurt equities, already vulnerable thanks to sky high valuations. Stocks are “at risk of a correction if things don’t stick very close to script,” said Mark Zandi, chief economist at Moody’s Analytics. Rotation underway Usually, December is a seasonally strong month for stocks. It’s the second best performing month of the year for the S & P 500, averaging a 1.3% advance in data going back to 1929, according to a note from UBS. What’s more, those gains are typically concentrated in the back half of the month. The S & P 500 is just a short distance away from that 7,000 milestone. On Thursday, it closed above 6,900 for the first time. The Dow Jones Industrial Average notched its own closing high. Next week, though, could determine which stocks are the ones to lead any year-end rally. This week, tech stocks were the big laggards, after Oracle and Broadcom ‘s disappointing quarterly results, signaling a rotation away from everything tied to artificial intelligence. That prompted many investors to call for a “value rebound.” This week, only the Dow, closely tied to old-economy companies, outperformed, rising 1%. The other two major averages posted weekly losses, with the Nasdaq dropping 1.6%. Financials outperformed. Small caps hit an all-time high. Yet the rotation into areas that had been lagging could also reverse if the economic reports next week leave investors worried for the economic outlook. “Technology is definitely seeing money move out, and people are rotating into sectors that won’t really bring a huge tailwind to the markets,” Freedom Capital Markets’ Woods said. “But they’ll keep the markets afloat until technology gets its footing back and can lead us higher.” Week ahead calendar All times ET. Monday, Dec. 15 Tuesday, Dec. 16 8:30 a.m. Nonfarm Payrolls (November) 8:30 a.m. Retail Sales (October) Earnings: Lennar Wednesday, Dec. 17 Earnings: Micron Technology , General Mills Thursday, Dec. 18 8:30 a.m. Consumer Price Index (November) 8:30 a.m. Real Earnings (November) Jobless Claims (Week ending December 13) Earnings: Nike , FedEx , Cintas , Darden Restaurants Friday, Dec. 19 Earnings: Lamb Weston , Paychex , Conagra Brands
