Investing.com -- Stocks gave back some of Monday's gains as investors prepared for the consumer price index report for July this week.
But before that, bank stocks were weighed on Tuesday by a downgrade on several banks by Moody's Investors Service, citing rising interest rates that put pressure on asset-liability management. Investors are worried that a worsening view on the banking sector could result in a pullback in credit, sparking an economic slowdown.
The Federal Reserve won't meet again on interest rate policy for another month. Futures traders largely expect the central bank will hold rates steady then after raising them by a quarter of a percentage point in July. But futures markets remain divided on whether the bank will raise rates one more time this year.
Thursday's inflation report could factor heavily into the Fed's thinking. Analysts expect the headline number to inch higher than June's reading on an annualized basis, though core prices that strip out energy and food are expected to match June's numbers on a month to month comparison.
Friday brings the latest reading on producer prices, which could add further understanding to the state of inflation.
Here are three things that could affect markets tomorrow:
1. Disney earnings
Entertainment giant Walt Disney Company (NYSE:DIS) is expected to report earnings per share of 98 cents on revenue of $22.5 billion, and analysts will be listening for any updates on the future of its ESPN sports channel and the movie studio's plans for navigating an ongoing writer and actor strike in Hollywood.
2. Honda earnings
Automaker Honda Motor Co Ltd ADR (NYSE:HMC) is expected to report earnings per share of $1.08 on revenue of $32.8B.
3. Wendy's reports
The fast-food chain The Wendy’s Co (NASDAQ:WEN) is expected to report earnings per share of 27 cents on revenue of $566.4 million.