Stocks closed higher yesterday with all of the major indexes in the green. And both the S&P and Nasdaq made another new all-time high close.

The market liked what it heard from Fed Chair Jerome Powell yesterday, when he spoke at the European Central Bank Forum on Central Banking, in Sintra, Portugal. He gave reassuring comments on the U.S. economy and inflation by saying, there's been "good progress on inflation with growth at a good level and with a strong labor market."

He went on to say that "ultimately, we think rates will have to come down to continue to support that. But so far, they haven't had to. And that's why we're watching so carefully for signs of weakness. We don't really see that. We kind of see what we wanted to see, which was gradual cooling in demand, gradual rebalancing in the labor market, while we continue to make progress on inflation. So, we're getting good results here."

After last week's Personal Consumption Expenditures (PCE) index, which showed inflation heading back down again, and confirming what the CPI and PPI reports showed a few weeks prior, Mr. Powell sounded confident that we "are getting back on the disinflationary path." Although, he followed that by saying "we want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy."

So it looks like we still have another few months of data to collect before the Fed starts cutting. But that seems to comport with what the markets are expecting as virtually nobody sees a cut until September at the earliest (69% chance), with the odds growing even greater for November (almost 80%), and greater still for December (almost 95% chance).

In addition to inflation readings, the Fed will also be watching the labor market. And all eyes will be on Friday's Employment Situation report. While a continued easing of inflation is necessary before the Fed begins to cut, a combination of both easing inflation and a cooling of the labor market, would likely help the Fed arrive at their desired confidence level quicker in order to adjust monetary policy.

In other news, yesterday's Job Openings and Labor Turnover Survey report (or JOLTS for short), showed an increase in job openings at 8.140 million, up from last month's 7.919M and views for 7.9M.

Today we'll get MBA Mortgage Applications, the Challenger Job-Cut report, the ADP Employment Report, Weekly Jobless Claims, the International Trade in Goods and Services report, the PMI Composite Report, the ISM Services Index, and Factory Orders.

We'll also get the FOMC Minutes from last month's Fed meeting.

Should be a busy day, especially with the market closing early today (1:00 PM ET).

Note, the market will be closed on Thursday for the July 4th (Independence Day) holiday.

Trading resumes on Friday as normal. And remember, the Employment Situation report comes out on Friday at 8:30 AM ET.

In the meantime, enjoy the Fourth of July.

See you on Friday,