Wall Street starts the week at a record high — and with plenty to prove.

The S&P 500 closed Friday at 7,757.64, an all-time high that capped its strongest week in months. The Nasdaq Composite climbed 1.3% to 26,690.62, and the Dow Jones Industrial Average added 151.83 points, or 0.28%, to finish at 54,036.93.

The odd part is what drove the move: bad news. Friday’s July employment report showed the U.S. economy lost 23,000 jobs, against forecasts for a gain of roughly 95,000, according to the Bureau of Labor Statistics. Revisions cut more than 100,000 jobs from the May and June tallies. Stocks rallied anyway, because a weakening labor market takes pressure off the Federal Reserve to keep tightening policy.

That backdrop sets up a data-heavy week that will decide whether the rally has more room to run.

Why CPI is the week’s main event

The Fed’s benchmark rate sits at 3.50%-3.75%, and until Friday, traders were split on whether Chair Kevin Warsh’s committee would raise it again in September. After the jobs miss, the CME FedWatch tool showed roughly a 56% chance the Fed holds at its September 15-16 meeting, with hike odds down to about 44%. That question — whether the Fed really raises rates — now hangs on inflation.

The July Consumer Price Index lands Wednesday, August 12, at 8:30 a.m. ET. It is the single most important release of the week. A hot print would revive the case for another hike and could stall the rally near its highs; a soft number would cement expectations for a pause and give bulls fresh cover. The Fed’s stated inflation target is 2%.

Producer prices follow Thursday, and July retail sales close the week Friday — a read on whether consumers are still spending as the labor market cools.

AI earnings take center stage

Earnings are lighter than in July’s megacap crush, but two names matter. CoreWeave reports Tuesday, August 11, after the close, offering the week’s clearest look at whether AI infrastructure demand is still accelerating. Applied Materials follows Thursday, August 13, with results that double as a health check on the chip-equipment cycle. Both feed directly into the semiconductor trade that revived chip stocks and carried the Nasdaq to its Friday gain.

The stakes are high because valuations are stretched. With the index at a record, the market’s leadership is concentrated in a handful of high-multiple technology names, and any disappointment on AI spending guidance would land harder than usual.

Bonds and the dollar

The bond market is flashing its own signal. The 10-year Treasury yield fell to about 4.6% on Friday as the weak payrolls data pushed money into government debt. That drop was fuel for stocks — lower yields make future earnings worth more today — but the relationship cuts both ways. A hot CPI print Wednesday would send yields back up and pressure the same expensive tech names now leading the market.

What to watch for the open

Monday is likely to be quiet, with traders reluctant to place big bets before Wednesday’s inflation data. The sequence to track:

  • Tuesday, Aug. 11 (after close): CoreWeave earnings — the first AI-demand read of the week.
  • Wednesday, Aug. 12 (8:30 a.m. ET): July CPI — the pivot for September rate expectations.
  • Thursday, Aug. 13: July PPI in the morning, Applied Materials after the close.
  • Friday, Aug. 14 (8:30 a.m. ET): July retail sales — the week’s final gauge of consumer strength.

With the S&P 500 at a record and the Fed’s next move genuinely in play, this is a week where a single number can set the tone. Watch the CPI at 8:30 Wednesday: everything else this week bends around it.