06:22 AM EST, 12/09/2024 (MT Newswires) -- US equity investors will focus on inflation this week to gauge the extent of monetary policy easing likely next year while closely watching quarterly earnings from a couple of technology mega-caps.

* Investors will monitor the price data due Wednesday following last week's nonfarm payrolls, which showed the US economy added more jobs than expected in November and the jobless rate ticked up to 4.2%.

* The consumer price index might inform pricing for the Fed, but there is "likely a high bar set to knock markets off," having already priced most of a quarter point reduction, a Scotiabank note said late Friday. Scotiabank expects November's headline and core CPI readings to rise 0.3% month-over-month seasonally-adjusted. That would translate into 2.7% year-over-year for headline and 3.3% for core.

* On the heels of the solid payrolls report Friday, "if the inflation estimates are on the mark, then it could at a minimum drive some dissenting voices at this meeting," the Scotiabank note said. The reading may also be the last evidence influencing the Fed's upcoming Summary of Economic Projections.

* Fed Chair Jerome Powell said last week policymakers can be cautious while easing monetary policy, given the strength of the US economy. The Fed is now in a blackout period ahead of its policy decision on Dec. 18.

* As of early Monday morning, the probability of a 25 basis-point cut in interest soared to 87%, compared with 62% a week ago, according to the FedWatch Tool. But, through December next year, the highest probability is the Fed will reduce its target rate to 3.75% to 4%, implying limited cuts from the current level.

* Earnings due this week include Oracle (ORCL), Adobe (ADBE), Costco (COST), and Broadcom ( AVGO ) . Last week, market heavyweights such as Tesla (TSLA), Meta Platforms ( META ) , Amazon.com ( AMZN ) , and Microsoft ( MSFT ) were among the biggest gainers, helping push the S&P 500 and the Nasdaq Composite higher for the third consecutive week.