Stocks faced challenges in gaining momentum last week due to uncertainties surrounding President Trump's tariff plans that lingered over the markets.

The S&P 500 increased approximately by 0.5%, with the Dow Jones Industrial rising by over 1%, and the Nasdaq Composite ticking up by nearly 0.2%.

In the upcoming week, the release of the Fed's preferred inflation gauge will be a highlight among economic data. Additionally, updates on manufacturing and services sector activity, consumer confidence, and the final report on fourth-quarter economic growth are anticipated.

Among corporate news, Dollar Tree (DLTR), Lululemon (LULU), and KB Home (KBH) will lead a relatively subdued lineup of scheduled financial reports.

The Federal Reserve held interest rates steady during the prior week, revising its economic forecast to predict higher inflation and slower economic growth compared to earlier expectations. Fed officials' median forecast suggests two interest rate cuts in 2025, aligning with market expectations before the meeting.

Federal Reserve Chair Jerome Powell acknowledged that tariffs have introduced heightened uncertainty into the economic outlook. He mentioned that the likely scenario is that increased inflation in 2025 will have a temporary impact from tariffs.

Economists and investment strategists on Wall Street interpreted the meeting as an indication that the Fed, like the rest of the market, is adopting a wait-and-see approach regarding President Trump's tariff plans.

Investors are eagerly awaiting clarity on the potential influence of tariffs on inflation, with a focus on February's price increases. Economists anticipate further indications of subdued inflation in the upcoming Personal Consumption Expenditures (PCE) report, with expectations for core PCE, excluding volatile categories like food and energy, to reach 2.7% annually in February, slightly up from the 2.6% in January. Projection for core PCE on a monthly basis remains at 0.3%, unchanged from January.