Investors are closely watching the U.S. personal consumption expenditures (PCE) inflation data, the Federal Reserve's preferred inflation measure, to assess potential interest rate adjustments amid ongoing tariff and inflation concerns.

Federal Reserve officials, including some potential successors to Chair Jerome Powell, have indicated that rate cuts could begin as early as next month, with discussions about ending the current steady rate stance.

U.S. stock futures dipped slightly but remain on track for strong monthly gains, with major indices like the S&P 500, Nasdaq, and Dow reaching or nearing record highs in August, buoyed by positive economic data and market sentiment.

Oil prices experienced a slight decline but are set for a weekly increase, driven by geopolitical tensions involving Russian supply disruptions and the end of the U.S. summer driving season, despite a more than 6% monthly decline due to increased OPEC output.

European inflation data from France, Spain, and Germany are anticipated, with the European Central Bank expected to keep rates steady at 2%, amid mixed opinions on inflation and concerns over the impact of U.S. tariffs on the eurozone economy.

The July PCE inflation figures are expected to show a 0.3% monthly rise, keeping the annual rate at 2.9%, but there is ongoing concern that tariffs introduced during President Trump’s administration may be affecting consumer prices.

The Trump administration has ended the 'de minimis' exemption for duty-free imports under $800, aiming to combat illegal trafficking and fentanyl entry, though this move is likely to raise prices for U.S. consumers importing goods, especially from China.

The upcoming July PCE inflation report is expected to show a 0.3% monthly increase, maintaining an annual rate of 2.9%, though concerns persist that tariffs from the Trump administration may be influencing consumer prices.