The Week Ahead: US-China Summit in Washington, Costco Earnings and Fed Rate Path in Focus

TradingKey - For the week of September 21 to 25 ET, the US stock market will focus heavily on the summit between the leaders of China and the US, the Federal Reserve's policy outlook, and economic data such as US new home sales and durable goods orders.

Chinese President Xi Jinping plans to visit the United States, where US President Donald Trump will host a meeting with him in Washington on September 24. Trade, tariffs, tech restrictions, artificial intelligence, and critical mineral policies such as rare earths are expected to be key areas of market focus.

On the economic data front, the US will release preliminary September S&P Global Purchasing Managers' Index (PMI) figures, along with August new home sales and durable goods orders. On the earnings front, companies such as Costco (COST), AutoZone (AZO), and General Mills (GIS) will report their earnings. All times listed in this article are in Eastern Time.

Major Events Preview

U.S.-China Presidential Summit: Focus on Trade and Tech Policy

Chinese President Xi Jinping plans to visit the United States. U.S. President Donald Trump will host Xi in Washington on September 24 for a summit meeting. This will mark Xi's first visit to the White House in ten years.

Trade truce arrangements, tariffs, U.S. tech export restrictions, critical minerals such as rare earths, artificial intelligence, and agricultural trade are expected to be the main focus of the meeting. U.S. Trade Representative Greer previously stated that both sides may announce some progress regarding agriculture and non-tariff barriers.

Ahead of the meeting, U.S. Treasury Secretary Bessent and Trade Representative Greer will hold economic and trade consultations with Chinese Vice Premier He Lifeng and his delegation in New York on September 20 to discuss issues such as trade, artificial intelligence, and rare earth supply.

If both sides make progress on a tariff truce, agricultural purchases, or critical mineral supplies, Chinese ADRs, semiconductors, industrial, and agricultural sectors may benefit. If no breakthroughs are achieved on tech export restrictions and trade arrangements, market volatility in related sectors could rise.

Market Evaluates Future Rate Path Following Fed Rate Hike

At its September FOMC meeting, the Federal Reserve raised the target range for the federal funds rate by 25 basis points to 3.75% to 4.00%, marking its first rate hike since July 2023.

The latest economic projections show that the median forecast for the policy rate at the end of 2026 rose from 3.8% in June to 4.1%, implying scope for one more rate hike within the year.

Although new core inflation data is lacking during the week, U.S. Treasury yields, the U.S. dollar, and rate futures could still fluctuate around policy expectations. If economic data continues to show robust demand, the market may raise expectations for subsequent rate hikes; if manufacturing, housing, or corporate orders weaken significantly, investors may reassess the scope for further policy tightening.

Costco Earnings: Focus on Consumer Demand and Profit Margins

Costco will report its fourth-quarter fiscal 2026 financial results after market close on Thursday (September 24) and hold an earnings conference call at 5:00 p.m.

The company previously disclosed that net sales for the fourth fiscal quarter ended August 30 were $93.9 billion, up 11.3% year-over-year. Excluding the impacts of gasoline prices and foreign exchange fluctuations, total company comparable sales increased by 6.7%, and comparable sales for digital channels grew by 19.8%.

This earnings report will focus on membership fee revenue, renewal rates, merchandise gross margins, operating expenses, and earnings per share. Management's commentary on consumer spending, merchandise prices, tariff impacts, and new store expansion plans will also provide references for assessing U.S. retail demand and Costco's subsequent earnings performance.

Core Schedule for the Week

Monday (September 21)

Key Events: August Chicago Fed National Activity Index, U.S.-China Economic and Trade Consultations

The U.S. will release the August Chicago Fed National Activity Index on Monday, but major economic data capable of significantly altering interest rate expectations remain sparse. The schedule for key corporate earnings reports is also relatively light.

U.S. Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer are scheduled to hold economic and trade consultations with Chinese Vice Premier He Lifeng in New York on September 20. On Monday, markets will focus on signaling from the talks regarding issues such as trade, artificial intelligence, and rare earth supplies.

Tuesday (September 22)

Key Events: September Richmond Fed Manufacturing Index, AutoZone Earnings, KB Home Earnings

On the economic data front, the Richmond Fed will release its September Manufacturing Index. The survey primarily reflects operating conditions for manufacturing firms in the Fifth Federal Reserve District, offering market insight into trends in shipments, new orders, employment, and prices.

On the earnings front, AutoZone will release its fourth-quarter and full-year fiscal 2026 financial results before the market open. Investors will monitor same-store sales, commercial client business, inventory, margins, and the impact of rising average vehicle age on demand for replacement parts.

KB Home (KBH) will report its third-quarter fiscal 2026 financial results after the market close, with market attention focused on new orders, deliveries, average selling prices, sales incentives, and housing gross margins.

Wednesday (September 23)

Key Events: Preliminary September S&P Global PMI, General Mills Earnings

S&P Global will release the preliminary September U.S. Manufacturing, Services, and Composite PMI data at 9:45 a.m.

The PMI survey covers business output, new orders, employment, input costs, and selling prices, providing insights into private-sector growth and inflationary pressures in the U.S. Continued expansion in manufacturing and services could reinforce expectations of economic resilience, whereas a sharp decline in the figures might heighten concerns that elevated interest rates are suppressing demand.

On the earnings front, General Mills will report its first-quarter fiscal 2027 financial results before the market open. Markets will focus on sales volume, product pricing, gross margins, North America Retail operations, and full-year guidance to assess consumer demand for food products and cost pressures.

Thursday (September 24)

Key Events: U.S.-China Presidential Summit, Costco Earnings

Chinese President Xi Jinping plans to visit the U.S. and hold a meeting with U.S. President Donald Trump in Washington on September 24. Markets will closely watch statements from both sides on issues including trade, tariffs, technology restrictions, artificial intelligence, and critical minerals.

The outcome of the meeting could shape market expectations regarding U.S.-China economic ties and supply chain policies, potentially impacting Chinese ADRs, semiconductors, industrials, agriculture, and retail sectors.

On the economic data front, the U.S. will release August new home sales at 10:00 a.m. The new home sales data will offer insight into how mortgage rates and housing affordability pressures are affecting residential demand.

On the earnings front, Darden Restaurants (DRI) will report its first-quarter fiscal 2027 financial results before the market open, while Costco will report its fourth-quarter and full-year fiscal 2026 results after the market close.

Friday (September 25)

Key Events: August Durable Goods Orders MoM, Final September University of Michigan Consumer Sentiment Index

The U.S. will release the August durable goods orders MoM data at 8:30 a.m. Beyond the headline reading, market participants will focus on orders excluding transportation equipment, as well as non-defense capital goods orders excluding aircraft, a key indicator of business equipment spending trends.

The University of Michigan will release the final September Consumer Sentiment Index at 10:00 a.m. The preliminary reading declined from 51.7 in August to 47.8, with one-year and long-term inflation expectations rising to 4.6% and 3.4%, respectively.

This week, market focus centers on the U.S.-China presidential summit, the Federal Reserve's interest rate trajectory, and U.S. housing and manufacturing data. Earnings from Costco and KB Home will highlight consumer demand and conditions in the new home market, respectively.