Trading the Week: Easing into 2H

The markets should saunter into the second half of the year as July markets are typically light in volume and have muted moves throughout the month, especially during the first week.

However, volatility returned to the market on Thursday as investors pared bet and the S&P 500 had its largest decline in the past six weeks. Volumes also finished up the week higher than average.

"With the holiday-shortened week -- half-day Monday and closed on Tuesday -- we expected an uptick this week in volumes as many will take the entire week off," Larry Peruzzi, managing director International Trading at Mischler Financial Group, told Markets Media.

The second half of the week will witness more information-gathering while The Street awaits second-quarter earning announcements to roll out later in the month,

Highlighting next week will be FOMC meeting minutes on Wednesday, according to Peruzzi. "With the growing confusion regarding global central bank policy, the minutes should see increased scrutiny," he added.

David Rosenberg, an economist at Gluskin Scheff, expects that the Fed's preoccupation with inflation usually peaks as it becomes yesterday's news, according to Business Insider.

"It is almost comical to read the old FOMC minutes and see how much talk there is about inflation just as the recession the Fed never sees is about to start," he wrote in a note to clients. "The Fed practically went into each recession of the past four decades — the ones in 1970, 1973, 1980, 1981, 1990, 2001 and 2008 — without ever seeing it coming, even though it had already arrived."

From political and policy perspective, Peruzzi sees the actions of the Trump Administration and Congress as a wild card capable of producing fireworks.

"Healthcare and travel ban will perk investors interest, but we don't expect much to happen," he noted.