Stocks closed mixed yesterday, but once again, the S&P and Nasdaq each made another new all-time high and close.

Yesterday, Fed Chair Jerome Powell, in his Semiannual Monetary Policy testimony to the U.S. Senate Committee on Banking, Housing, and Urban Affairs, said the economy has made "considerable progress" on inflation, while maintaining a "strong, but not overheated" job market.

But he also said that "elevated inflation is not the only risk we face," and cited that "the most recent labor market data do send...a pretty clear signal that labor market conditions have cooled considerably compared to where they were two years ago."

He followed that up by saying "we're very much balancing those two risks." Cut too soon and run the risk of reigniting inflation. Cut too late and the economy slows too much and unemployment rises.

But Mr. Powell reiterated the Fed's stance on being data dependent, saying they'll "make decisions meeting by meeting." And that "more good data would strengthen our confidence that inflation is moving sustainably toward 2%."

In other news, yesterday's NFIB Small Business Optimism Index rose to 91.5 vs. last month's 90.5 and views for 90.3.

Today, Mr. Powell will give his Semiannual Monetary Policy testimony to the U.S. House Financial Services Committee. That starts at 10:00 AM ET.

We'll also get MBA Mortgage Applications, Wholesale Inventories, and the EIA Petroleum Status report.

And we'll hear from Fed policymakers Austan Goolsbee (President of the Federal Reserve Bank of Chicago), and Lisa Cook (Fed Governor), as they speak at their engagements throughout the day.

But again, the main event(s) this week are Thursday's Consumer Price Index (CPI) inflation report, and then Friday's Producer Price Index (PPI) inflation report.

Given the Fed's need to see "more good data" on inflation, every report matters. And while two more good reports this week are highly unlikely to cause the Fed to cut rates when they meet again on July 30-31, it will add to the list of good inflation reports, and will help make the case for cuts later in the year. (Odds are for September at the earliest, but more likely November or December.)

In addition to the inflation numbers, we'll also see the unofficial start to earnings season this week with names like PepsiCo, Delta Air Lines, and Conagra reporting on Thursday, and big banks JPMorgan Chase, Wells Fargo, and Citigroup reporting on Friday. Next week is the official start when Alcoa reports on Wednesday after the close.

Earnings season is always an exciting time since stocks typically go up during earnings season.

And I expect that to happen again this earnings season, just like the last. Especially with S&P earnings expected to be up by 8.6% with sales up another 4.7%.

So make sure you're taking full advantage of it.

See you tomorrow,