In a promising start to the week, the Nasdaq and S&P 500 indexes achieved fresh all-time closing highs. The tech-heavy Nasdaq rose by 0.95% to reach 17,857, while the S&P 500 increased by 0.77% to settle at 5,473. Meanwhile, the Dow Jones Industrial Average saw a modest gain of 0.41%, now sitting at 38,778, still a distance away from its mid-May peak above 40,000. The small-cap Russell 2000 also experienced a positive trend, climbing by 0.79% to 2,022.

Lennar Corp., a mid-level homebuilder, reported impressive Q2 earnings that surpassed expectations. The company posted earnings of $3.45 per share, exceeding the Zacks consensus by a solid quarter. Additionally, Lennar generated revenues of $8.77 billion, surpassing analysts' expectations of $8.57 billion. Lennar attributed its success to a 19% increase in new orders and a 15% growth in deliveries. The average home price stood at $426,000, a 1% improvement compared to the previous quarter's decline of 8%. However, high mortgage rates continue to pose challenges for the industry, although demand remains steady. Lennar's shares experienced a slight decline of 1.8% in late trading, possibly due to cautious guidance on deliveries moving forward.

Although Lennar is not currently the highest-rated homebuilder, the sector boasts four Zacks Rank #1 (Strong Buy) stocks that have already reported quarterly earnings: MI Homes, PulteGroup, Taylor Morrison, and Tri Pointe Homes. Another prominent homebuilder, KB Home, holding a Zacks Rank #2 (Buy), will be reporting its quarterly earnings after the closing bell on Tuesday.

On Tuesday morning, retail sales numbers for May will be released. It is expected that there will be a 20 basis points (bps) increase compared to the flat reading of 0.0% in April. On a year-over-year basis, the previous figure stood at 3.0%, which represented an 80 bps decrease from the previous month. A moderation in retail sales would indicate a potential cooling of the economy.

Looking ahead, the next major economic news event will occur late next week when the comprehensive Personal Consumption Expenditures (PCE) report, the Federal Reserve's preferred gauge of inflation, will be published. In the previous month, the year-over-year headline and core figures remained steady at +2.65% and +2.75%, respectively. This consistency indicates a positive trend, and if lower-growth signals persist without tipping into a recession, it may prompt a reassessment of the current high Fed funds rate.