Investing.com -- It’s set to be a busy week in markets with U.S. inflation data on tap that could help cement expectations for a September rate cut. Earnings season kicks into high gear with the first of the mega caps and a swathe of European banks set to report. Meanwhile PMI data out of the eurozone will bring the path towards the next European Central Bank rate cut more sharply into focus. Here's your look at what's happening in markets for the week ahead.

1. PCE inflation data

U.S. inflation data on Friday will test market expectations that the Federal Reserve is all but certain to cut interest rates in September.

Economists are expecting June's personal consumption expenditures (PCE) price index to have climbed 0.1% for the second straight month, which would bring three-month annualized core inflation down to the slowest pace this year, below the Fed’s 2% target.

The consumer price index fell in June for the first time in four years. That cooler-than-expected report set off a rotation in equities and cemented market expectations that the Fed is primed to cut rates in September.

Several days after CPI, Fed Chair Jerome Powell said second-quarter inflation readings "add somewhat to confidence" that the pace of price increases is returning to the Fed's target in a sustainable fashion.

2. Earnings season gets into full swing

As earnings season enters high gear, bullish investors hope solid corporate results will stem a tumble in technology shares that has cooled this year’s U.S. stock rally.

The S&P 500’s technology sector has dropped nearly 6% in just over a week as growing expectations of interest rate cuts and a second Donald Trump presidency draw money away from this year’s winners and into sectors that have languished in 2024.

Second-quarter earnings could help tech reclaim the spotlight. Tesla (NASDAQ:TSLA) and Google-parent Alphabet (NASDAQ:GOOGL) both report on Tuesday, kicking off results from the "Magnificent Seven" megacap group of stocks that have propelled markets since early 2023.

IBM (NYSE:IBM), Ford (NYSE:F) and General Motors (NYSE:GM) are among some of the other big-name companies set to report during the coming week, with investors keen to hear companies’ insights on how strong the consumer is and how is the outlook for future economic growth.

3. European bank earnings

A European banking sector that's enjoyed a run of rising profits and share prices faces a reality check this week as second-quarter earnings season gets into gear.

Key to the outlook is net interest income, which surged because of rate hikes. However, the party may be short-lived as the ECB signals further rate cuts and the Bank of England prepares to ease monetary policy.