Wall Street will navigate a light slate of headline drivers over the coming week, but could nonetheless face a series of risks heading into the end of the third quarter, as it looks to build on late-September gains powered in part by Federal Reserve interest-rate cuts.

The S&P 500, fresh off its best five-day gain of the year heading into last week's Fed rate decision, has stretched its 2024 gain to around 20% heading into the final three months of the year. The benchmark is supported in part by a resilient economy, rising corporate profits and a newly dovish central bank outlook.

Megacap tech stocks, of course, are responsible for the bulk of the benchmark's gains, but analysts are starting to see a consistent rotation into value and midcap stocks. The Russell 2000 has well outpaced gains for both the S&P 500 and the tech-focused Nasdaq over the past month.

Sign up for TheStreet's free daily newsletter.

That rotation, tied to the Fed's longer-term rate projections, will be tested this week with key readings on consumer confidence, business activity and new-home sales, all of which are expected over the first three trading days.

Data from Bank of America's weekly "Flow Show" report suggest investors are still hoping to find equity-market value. Some $33.8 billion flowed into U.S. stock funds last week, the third highest total of the year.

"As rate-cut bets have fluctuated throughout 2024, solid earnings growth and a strong performance from a larger number of sectors have powered the S&P 500 to new high after new high," said Bret Kenwell, U.S. investment analyst at eToro.

"So long as the economy holds up and inflation doesn’t roar back to life, lower rates and strong earnings growth can continue to drive stocks higher over the long term."

Larger headline risks heading into the end of the week include the Labor Department's weekly tally of jobless claims — the final reading before its crucial September employment report on Oct. 4 — as well as the release of the Fed's' preferred inflation gauge, the PCE price index, before trading starts on Friday.

Prior to the opening bell on Thursday, the Commerce Department will also publish its second revision of second-quarter GDP growth, which was last pegged at 3%.

Micron and Costco earnings on deck

On the earnings front, chipmaker Micron Technology  (MU)  will publish its fiscal- fourth-quarter report after the close of trading Wednesday. That release is expected to show key developments in memory chip pricing as well as a broader sense of the AI investment theme heading into the final months of the year and beyond.

Citigroup analysts suggest around 80% of Micron investors are bearish heading into the report, adding that "buyside expectations for November quarter guidance are in line or slightly below our revised estimates of $8 billion in revenue and $1.24 in earnings per share."

Micron shares have fallen more than 37% since the group reported disappointing third-quarter earnings on June 26.

Related: Stocks set for big Fed boost after summer rate cut rethink

Warehouse discount retailer Costco  (COST) , meanwhile, will post quarterly earnings after the close of trading Thursday, just weeks after it unveiled its first membership-fee increase in more than seven years.

Costco's outlook will be an important component in understanding the strength of consumer spending heading into the holiday period, with more details to come with the start of the third-quarter earnings season in mid-October.

LSEG data suggest collective S&P 500 profits for the three months ending in September are likely to rise 5.7% from a year earlier to a share-weighted $512.7 billion.

That pace will pick up notably over the final months of the year, with LSEG data forecasting a 13.4% advance for collective earnings on the bluechip benchmark.

Bond markets and economic soft landing

Bond markets are also likely to be in sharp focus this week following a curious post-Fed-cut reaction that lifted 10-year note yields to 3.745% and 2-year paper north of 3.6%.

The Treasury will sell $183 billion in new coupon-bearing bonds this week, including a $69 billion auction of 2-year notes on Tuesday.

Another key event this week, which will include several public remarks from Fed officials, will be an address from Chairman Jerome Powell prior to the U.S. Treasury Market Conference in New York prior to the start of trading on Thursday.

Last week's half-point rate cut dropped the Federal Funds Rate to between 4.75% and 5%. Powell's remarks to the media following the decision suggested that while inflation pressures are likely to continue easing into year-end, labor-market weakness is starting to develop in such as way as to — at least at the moment — potentially hobble the surprisingly resilient economy.

Related: Fed delivers on big rate cut, signals focus on cooling job market

Bank of America described the move as a "soft cut" that could support bets on a soft landing, easing inflation with no recession, for the world's biggest economy. The investment firm added that the S&P 500 rose around 10% in the first six months following similar rate reductions in 1984, 1995 and 2019.

"If all goes as planned, inflation figures will continue to moderate before settling in at the Fed’s target sometime late next year or early 2026," said Elizabeth Renter, senior economist at NerdWallet. "And hopefully with no significant economic downturn in the process."

More Economic Analysis:

• Jobs report surprise adds to case for bigger Fed interest rate cuts

• Jobs report to signal timing and size of autumn Fed interest rate cuts

• Fed rate cuts may not guarantee a September stock market rally

Mimi Duff, managing director at GenTrust, is slightly more skeptical, arguing that the August volatility spike, as well as cooling in the job market, needs to be closely monitored.

"We feel markets are placing too high a probability of the perfect soft landing at the moment," she said. ""We put a higher probability of a recession/slowdown over the coming year than the markets, and this is driving our equity underweight."

Related: Veteran fund manager sees world of pain coming for stocks