The Week Ahead: US CPI and PPI in Focus as Market Eyes CRWV and AMAT Earnings

TradingKey - In the coming week (August 10 to August 14), global market focus will shift back from employment to inflation. The US will successively release July Consumer Price Index (CPI), Producer Price Index (PPI), and retail sales data. Against the backdrop of persistent divergence in market expectations for a rate hike at the Federal Reserve's September meeting, these three data points could become key factors determining the next phase of movements in US Treasury yields, the US dollar, and US equities.

The market currently expects the US July CPI to rise 3.4% year-on-year, and core CPI to increase 2.5% year-on-year. The Federal Reserve kept interest rates unchanged at its July meeting, but three policymakers supported a rate hike. The market is currently pricing in a near 50-50 chance of a rate hike in September, which means any inflation data significantly higher than expected could quickly push the market to ramp up rate hike bets again.

On the corporate front, although the US earnings season has passed its peak, the AI infrastructure and semiconductor supply chain will still see several important earnings releases. AI cloud computing company CoreWeave ( CRWV ), optical communications leader Lumentum ( LITE ), optical communications and data center equipment company Coherent ( COHR) and semiconductor equipment giant Applied Materials ( AMAT) will successively release their earnings.

Major Events Preview

US July CPI Looms as Fed's September Rate Hike Expectations Face Key Test

On Wednesday (August 12), the US Bureau of Labor Statistics will release the July CPI, which is the most important macro data next week. According to the official schedule, the data will be released at 8:30 a.m. Eastern Time.

In terms of market expectations, July CPI is expected to rise 3.4% year-on-year, and core CPI is expected to increase 2.5% year-on-year. Previously released inflation data came in lower than market fears, but headline inflation remains above the Federal Reserve's 2% target. Therefore, the market is still assessing whether rising energy prices will further transmit to goods and services prices.

If July CPI is higher than expected, especially if core services prices reaccelerate, the market may further increase the probability of a September rate hike. Treasury yields and the US dollar are expected to rise, while high-valuation tech stocks and gold could face pressure.

Conversely, if CPI continues to come in lower than expected, it would suggest that the energy price shock has not yet formed broader inflationary pressure, and market concerns about another Fed rate hike could cool, thereby benefiting growth stocks and gold.

Since three policymakers supported a rate hike at the July Fed meeting, the sensitivity of the next policy decision to economic data has increased significantly. Consequently, the market impact of this CPI print could be higher than in a typical month.

US PPI and Retail Sales Take the Baton, Testing Both Inflation and Consumption

Following the CPI, the US will also release July PPI on Thursday (August 13) and July retail sales on Friday (August 14).

The US Bureau of Labor Statistics confirmed that July PPI will be released on August 13 at 8:30 a.m. Eastern Time. As an important measure of producer-side price pressures, PPI reflects whether the costs of raw materials, energy, transportation, and intermediate goods continue to rise, providing a reference for the market to judge future consumer inflation trends.

Friday's retail sales will test the resilience of US consumer spending. June retail sales grew 0.2% month-on-month, a significant slowdown from May, while consumer spending remains a key pillar of economic growth. The US Census Bureau has confirmed that July retail sales will be released on August 14.

If both CPI and PPI run high while retail sales remain strong, it will create a "high inflation + strong demand" combination, further bolstering the Fed's case for raising rates; if inflation moderates and consumer spending weakens, the market may start pricing in an economic cooling and a monetary policy pivot again.

AI Computing Earnings Heat Up Further, CoreWeave to Test Data Center Investment Appetite

After the market close on Tuesday (August 11), CoreWeave will release its second-quarter financial results and hold an earnings conference call at 5:00 p.m. Eastern Time.

CoreWeave is currently one of the most representative AI cloud infrastructure companies in the US stock market, so its earnings can directly reflect the demand from major AI clients for GPU computing power and data center capacity.

The company's first-quarter revenue reached $2.08 billion, up 112% year-on-year. The market currently expects second-quarter revenue to increase further to approximately $2.55 billion, representing a year-on-year growth rate of over 100%. However, compared to the rapid revenue growth, investors are paying closer attention to capital expenditures, debt levels, data center construction costs, and future cash flows.

Therefore, the core focus of this earnings release is not just whether revenue can beat expectations, but whether the company can prove that its massive infrastructure investments can gradually translate into stable profits and free cash flow. If order and revenue guidance continue to be upgraded, it may reinforce the investment thesis for AI infrastructure; if capital expenditures or financing pressures widen further, the market may continue to compress the valuations of highly leveraged AI infrastructure companies.

Optical Communications Earnings Flood In, Testing AI Data Center Interconnect Demand

Also after Tuesday's close, Lumentum will report its fourth-quarter and full-fiscal-year 2026 earnings. The company's revenue last quarter reached $808.4 million, up approximately 90% year-on-year, showing that optical communications demand for AI data centers maintains rapid growth.

The market will focus on the growth of high-speed optical transceivers, lasers, and data center optical communications business, as well as management's revenue and margin guidance for the next fiscal year.

After the market close on Wednesday (August 12), Coherent will also release its fourth-quarter and full-fiscal-year 2026 results. The company has confirmed that its earnings conference call will be held at 4:30 p.m. Eastern Time.

As AI cluster scales expand, data transmission speeds and bandwidth demands between servers continue to rise, making optical communications one of the critical bottlenecks in AI infrastructure. Therefore, orders, capacity, and future guidance from Lumentum and Coherent will serve as key signals for determining whether the build-out cycle of AI data centers continues to accelerate.

Applied Materials Earnings Loom: How Much Longer Can AI Chip Capital Expenditures Grow?

After the market close on Thursday (August 13), Applied Materials will report its third-quarter fiscal 2026 results and hold an earnings conference call at 4:30 p.m. Eastern Time. The company has officially confirmed this earnings date.

Investors will focus closely on demand for advanced logic chips, DRAM, HBM-related equipment, and advanced packaging businesses.

The expansion of AI computing power is driving wafer foundries, memory makers, and the advanced packaging supply chain to continuously increase equipment investments, while Applied Materials has also recently launched new equipment targeting DRAM and advanced packaging.

If management continues to provide a strong outlook for AI-related equipment demand and orders, it will further reinforce the long-term boom cycle thesis for the semiconductor equipment industry; if customer capital expenditures begin to show signs of slowing, it could heighten market concerns that the AI investment cycle is nearing a temporary peak.

The Week Ahead

Monday (August 10)

Keywords: Aftermath of US non-farm payrolls, China credit data window, geopolitical situation

Macroeconomic data will be relatively light next Monday. The market will first digest the US July non-farm payrolls report released this Friday and reassess the Federal Reserve's policy path for September.

Meanwhile, China's financial data for July, including new yuan loans, aggregate financing, and M2, are expected to be released between August 10 and August 15. A Reuters poll expects new yuan loans in July to drop sharply to 45 billion yuan, primarily affected by seasonal factors and weak financing demand from the real economy.

In addition, talks between Iran and Oman regarding security arrangements around the Strait of Hormuz will continue to impact international oil prices, inflation expectations, and global risk appetite.

Tuesday (August 11)

Keywords: CoreWeave earnings, Lumentum earnings

After the US market close, CoreWeave and Lumentum will release their earnings. The market will focus on AI cloud computing power demand, data center capital expenditures, and high-speed optical communication business growth, respectively.

Wednesday (August 12)

Keywords: US CPI, Coherent earnings

The US will release its July CPI. The market expects headline CPI to rise 3.4% year-on-year and core CPI to rise 2.5% year-on-year. The data will be one of the most critical indicators for judging whether the Federal Reserve will continue to raise interest rates in September.

After the US market close, Coherent will announce its latest financial results. The focus will be on optical communication demand for AI data centers, order growth, and guidance for the next fiscal year.

Thursday (August 13)

Keywords: US PPI, Applied Materials earnings

The US will release its July PPI. The market will observe whether cost pressures on the corporate side continue to transmit to consumer prices.

After the US market close, Applied Materials will release its quarterly results. Semiconductor equipment demand driven by AI chips, DRAM, and advanced packaging will be a key focus of market attention.

Friday (August 14)

Keywords: US retail sales, business inventories

The US will release its July retail sales, which is the last major macroeconomic data point for next week. The market will observe whether US household consumption remains resilient under the pressure of high interest rates and cost-of-living expenses.

The US will also release June business inventory data, providing additional clues for assessing the corporate inventory cycle and third-quarter economic growth.

Overall, the market's core logic next week will shift further from 'whether employment is strong enough' to 'whether inflation is heating up again.' If CPI, PPI, and retail sales are all stronger than expected, expectations for a September rate hike by the Federal Reserve could rise significantly, posing a new pricing shock to US Treasuries, the US dollar, gold, and highly-valued tech stocks. Conversely, if inflation continues to cool and consumption slows in tandem, the market may resume trading on a monetary policy pivot.

Meanwhile, earnings from CoreWeave, Lumentum, Coherent, and Applied Materials will conduct a concentrated test on the current AI capital expenditure cycle, spanning multiple links from AI computing power and optical communications to semiconductor equipment.