Stocks closed out a stellar first quarter last week. This week’s jobs report will help determine if the momentum will continue.

The S&P 500 (^GSPC) rose more than 10% in the first three months of the year, its best start to a year since 2019. Meanwhile the Nasdaq Composite (^IXIC) popped over 9% and the Dow Jones Industrial Average (^DJI) gained about 5.5% in the period.

Updates on the labor market will highlight the first trading week of the new quarter. Fresh readings on job openings, and wage data will preface the biggest headline of the week: The March jobs report, which is due out Friday morning. Updates on activity in the services and manufacturing parts of the economy are also on the economic calendar.

On the corporate side, results of a pivotal shareholder vote in Disney’s proxy battle with activist investor Nelson Peltz are expected on Wednesday, assuming the two sides don’t reach a deal beforehand.

The Fed’s preferred inflation gauge, the Personal Consumption Expenditures (PCE) excluding energy and food, increased 0.3% month-over-month in February.

At a San Francisco Federal Reserve conference, Fed chair Jerome Powell called the reading “more along the lines of what we want to see” and said that the job market and the economy are strong right now. “That means that we don’t need to be in a hurry to cut,” he said.

In the week ahead, focus will shift to whether that characterization of the economy holds up. With the Fed committed to holding rates higher until it sees that confidence, all eyes have turned to the labor market where continued resilient data has economists hopeful inflation can fall to 2% without the economy slipping into recession.

The March jobs report is expected to show 216,000 nonfarm payroll jobs were added to the US economy last month with unemployment falling to 3.8%, according to data from Bloomberg. In February, the US economy added 275,000 jobs while the unemployment rate hit 3.9%.

And, largely, economists don’t expect there to be any signs of cracks in the strong labor market story.

“For Friday’s employment report, we’re expecting that the jobs numbers will carry on with the strong momentum of the last few months,” Jefferies economics team, led by Thomas Simons, wrote in a research note on Thursday. “The revisions have been extreme lately, and the composition of payrolls has been less encouraging than it was throughout 2023, but we have not seen enough evidence in the peripheral labor market data to make a case that job growth is going to fall off a cliff.”

The fate of Disney’s (DIS) board will be determined this week following activist investor Nelson Peltz’s months-long battle for a boardroom shakeup. On Wednesday, investors will know if he won.

The results of the shareholder vote are expected to be announced at the entertainment giant’s annual stockholders meeting.

As Yahoo Finance’s Alexandra Canal reports, it’s a critical moment for Disney as the company navigates consumers’ shift away from traditional cable packages into mostly unprofitable streaming services. The company also faces succession questions with CEO Bob Iger’s contract set to expire at the end of 2026.

Peltz is seeking board seats for himself and former Disney CFO Jay Rasulo. Peltz’s hedge fund Trian Fund Management beneficially owns $3 billion of common stock in Disney.

Last week, we noted how some signs of investor sentiment are showing there may be more room for risk to flow into the market.

But other indicators are flashing that the market’s rip higher may be due for a break.

In a research note on Thursday, Citi’s equity strategy team noted the Levkovich Index, which uses 11 different inputs to measure investor sentiment, has entered “euphoria” for the first time during this bull market run.

Citi US equity strategist Scott Chronert wrote in a note to clients that the index triggered euphoria after increases in margin debt and short activity in markets, among other factors, pushed the reading higher. Typically, this trigger aligns with a lower probability of above average returns, per Chronert. But he warned the index was “not designed to be a short-term timing tool.

“A catalyst may still be needed to slow gains,” Chronert wrote. “Exhaustion may not be enough.”

Chronert told Yahoo Finance that the index is showing sentiment has become far more constructive over recent months amid the rally, and a period of “digestion” for markets could be expected soon.

“You have to acknowledge that you’re kind of chasing sentiment,” Chronert said. “There is a clear FOMO, fear of missing out, dynamic going on, that we’ve seen in the flows data. And we’re just trying to be a little bit more balanced in how aggressive to be right now.”

He added: “It doesn’t mean the big story is over. It just it just means that you have to respect that it does take some time from the fundamentals to grow into the price action.”

Economic data: S&P Global US Manufacturing PMI, March, final (52.4 previously); Construction spending month-over-month, February (0.5% expected, -0.2% prior); ISM manufacturing, March (48.5 expected, 47.8 prior)

Earnings: Cal-Maine Foods (CALM), Dave and Buster’s (PLAY), Paychex (PAYX)

Economic data: JOLTS Job Openings, February (8.87 million previously); Factory Orders, February (1.0% expected, -3.6% previously); Durable Goods Orders, February final (+1.4% previously)

Economic data: MBA Mortgage Applications, week ending March 29 (-0.7% previously); ADP employment change, March (150,000 expected, 140,000 previously); S&P Global US Services PMI, March, final (51.7previously); S&P Global US Composite PMI, March, final (52.2 previously); ISM Services, March (52.6 expected, 52.6previously)

Earnings: Conagra (CAG)

Economic data: Challenger jobs cuts, year-over-year, March (+8.8% previously); Weekly initial jobless claims, March 30 (210,000 previously)

Earnings: No notable earnings

Economic data: Nonfarm payrolls, March (+216,000 expected, +275,000 previously); Unemployment rate, March (3.8% expected, 3.9% previously); Average hourly earnings, month-over-month, March (+0.3% expected, +0.1% previously); Average hourly earnings, year-over-year, March (+4.3% previously); Average weekly hours worked, March (34.3 expected, 34.3 previously); Labor force participation rate, March (62.5% previously)

Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.

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