Enthusiasm about artificial intelligence and bets on lower interest rates powered equities to new heights last week. All three major indexes closed at records on Thursday, and the Nasdaq Composite index closed out the week up 2% for its 25th record close of the year on Friday.

Oracle's blowout guidance when it reported earnings last Tuesday gave another jolt to AI-related stocks, while the Bureau of Labor Statistics' downward revision of 911,000 jobs for the 12 months ending March added to Wall Street's confidence that the Federal Reserve will embark on an aggressive rate-cutting cycle.

The rubber will meet the road this Wednesday when the Federal Open Market Committee announces its monetary policy. It will be a busy week for central banks globally, as Canada, Norway, the United Kingdom, and Japan will also announce their monetary policy decisions.

But it's Fed Chairman Jerome Powell and the FOMC that will take center stage. Despite inflation running above the Fed's 2% target, a weakening labor market all but assures an interest-rate cut at the meeting. The question on investors' minds is how many more rate cuts they can expect through the end of this year and into next year.

Economic data to be released this week include the Census Bureau's retail sales data on Tuesday and housing starts on Wednesday.

Ferguson Enterprises releases earnings on Tuesday, General Mills on Wednesday, and FedEx and Lennar on Thursday.

Monday 9/15

The Federal Reserve Bank of New York releases the Empire State Manufacturing Survey for September. Economists forecast a 4.8 reading, about seven points less than in August. The August reading was the highest since last November. The survey tracks the manufacturing sector in the region, with positive readings indicating expansion and negative readings contraction.

Tuesday 9/16

Ferguson Enterprises releases fourth-quarter fiscal-2025 results.

The Census Bureau reports retail sales data for August. Consensus estimate is for a 0.2% month-over-month increase, following a 0.5% gain in July. Excluding autos, sales are expected to rise 0.4%, compared with 0.3% previously.

The National Association of Home Builders releases its Housing Market Index for September. The consensus call is for a 33 reading, one point more than in August. Readings below 50 indicate that home builders have a dour short-term outlook for the single-family housing market.

Wednesday 9/17

Bullish and General Mills announce earnings.

The Census Bureau reports new residential construction data for August. Expectations are for a seasonally adjusted annual rate of 1.37 million privately owned housing starts, about 60,000 fewer than in July.

The FOMC releases its monetary policy decision as well as its quarterly Summary of Economic Projections. The central bank is widely expected to cut the federal-funds rate by a quarter of a percentage point, to 4%-4.25%. Despite inflation running about a full percentage point above the Fed's 2% target, a weakening labor market has become the greater concern, as signaled by Powell in his speech at Jackson Hole, Wyo., in late August. Jobs growth has been an anemic 29,000 a month on average for the past three months. Compounding the issue, the BLS this past week revised significantly lower employment data for the 12 months ending March, suggesting that the labor market was much weaker than previously thought, even before the summer slump in hiring. In the FOMC's June SEP, the median projection was for two quarter-point rate cuts by the end of 2025, but traders are pricing in an 85% chance of three cuts for the rest of the year.

Thursday 9/18

Darden Restaurants, FactSet Research Systems, FedEx, and Lennar report quarterly results.

Friday 9/19

The Bank of Japan announces its monetary policy decision. The BoJ is expected to keep its key short-term interest rate unchanged, at 0.5%. Prime Minister Shigeru Ishiba resigned last week after his ruling Liberal Democratic Party suffered election losses over the summer. Yields on 30-year Japanese bonds hit a record high amid the political turmoil. One of the front-runners to replace Ishiba, Sanae Takaichi, has advocated for a looser monetary policy and criticized the BoJ for hiking interest rates in the past year.