U.S. equity markets saw bullish momentum this week, with the S&P 500 closing at a record high and the Nasdaq and Dow also posting solid gains.

Investor sentiment strengthened on expectations that the Federal Reserve is likely to cut rates soon, a view supported by softer-than-expected U.S. labor data. Additional optimism stemmed from President Trump’s trade agreement lowering tariffs on Japanese auto imports. Earnings produced mixed results, as Broadcom posted a strong beat with a landmark $10 billion AI chip order while Lululemon shares fell 19% on weaker guidance tied to tariff pressures.

Looking ahead, markets will focus on inflation updates next week, as both the Producer Price Index (PPI) and Consumer Price Index (CPI) reports are scheduled for Thursday. Core inflation readings will be closely tracked given their potential to alter expectations around monetary policy. Investors are currently assigning high odds to a 25-basis-point rate cut in September, and deviations in the inflation data could reshape that outlook. Meanwhile, Europe faces added political risk with upcoming confidence votes and elections in France, Britain, and Norway. Earnings releases are light, though Oracle is among the notable names set to report.

Given this economic backdrop, let us see how this impacts the performance of various investment strategies.