Market participants are keenly focused on two crucial economic data points that could dictate the Federal Reserve's next moves. First, a key Fed gauge of wage growth is expected to be updated this Friday, providing fresh insights into labor market tightness and potential inflationary pressures from rising wages. This metric is closely watched by bond traders as a leading indicator for the Fed's stance on inflation.

Following this, the June reading on consumer inflation (CPI) is scheduled for release next Tuesday. The CPI report is a primary determinant of the Fed's policy decisions, and any significant deviation from expectations could trigger substantial market volatility, particularly in bond yields and equity futures.

The interplay between wage growth and consumer inflation data will be critical in shaping the market's perception of future interest rate hikes. If both indicators suggest persistent inflationary pressures, the odds of further tightening by the Fed could increase, leading to a repricing of assets. Conversely, signs of cooling inflation and wage growth might signal a pause or even an end to the current rate hike cycle, offering support to risk assets.