The stock market keeps hitting new record highs.

The S&P 500 (^GSPC) and Nasdaq (^IXIC) both ended last week at their highest levels ever. The S&P 500 has now risen for 16 of the last 18 weeks for the first time since 1971, according to research from Deutsche Bank.

This week, Federal Reserve Chair Jerome Powell's testimony on Capitol Hill and the February jobs report will put the stock market's roaring rally to the test. Updates on economic activity in the services sector and job openings are also on the schedule.

With most of the S&P 500 done reporting earnings, Target (TGT), Costco (COST), and Kroger (KR) are three of the largest consumer-facing brands reporting corporate results in the coming week.

Fed fodder

Federal Reserve Chair Jerome Powell is set to deliver his semi-annual monetary policy testimony to the House and Senate beginning on Wednesday. Investors will listen closely for Powell's updates on the overall state of the US economy, the fight against inflation, and when the central bank may begin cutting interest rates.

Entering the week, Bloomberg data shows markets are pricing for the Fed to cut interest rates three times this year beginning in June as inflation's decline has slowed. This falls in line with recent commentary from Chair Powell and recent projections from the Fed itself. The Federal Open Market Committee will announce its latest policy decision and summary of economic projections on March 20.

Read more: What the Fed rate decision means for bank accounts, CDs, loans, and credit cards

The state of the labor market

With the inflation story recently hitting a snag as the Fed's preferred gauge saw its largest monthly increase in a year, Wall Street consensus now expects the central bank to be patient in cutting interest rates. Economists say a key to this policy decision going smoothly, and the economy avoiding recession, will be the labor market remaining resilient.

New jobs data slated for this week includes updates on wages and job openings. The headliner will be the February jobs report set for release on Friday morning at 8:30 a.m. ET.

The report is expected to show that 190,000 nonfarm payroll jobs were added to the US economy last month, with the unemployment rate remaining flat at 3.7%, according to data from Bloomberg. In January, the US economy shocked Wall Street with 353,000 job additions while the unemployment rate held steady at 3.7% for the third straight month.

Earnings update

Earnings season is just about over.

With 97% of the S&P 500 finished reporting earnings for the fourth quarter, the S&P 500 is projected to have earnings growth of 4% in the fourth quarter compared to the same period a year prior, per new FactSet data. This marks the second consecutive quarter of earnings growth for the benchmark index.

And, notably, the outlook for earnings growth in the current quarter isn't deteriorating at its normal pace.

FactSet senior earnings analyst John Butters noted that analysts usually reduce earnings estimates in the first two months of a quarter. During the past 20 years, earnings have typically been revised down by an average of 2.9%. For the current quarter, those earnings estimates have been revised down by just 2.2%.

History shows stocks have more room to run

One of the top calls on Wall Street entering 2024 was a choppy first few months of trading before a late-year rally. Many expected that uncertainty about the Federal Reserve's interest rate cut path and election fears would grip investors.

That didn't happen. Both the S&P 500 and Nasdaq Composite had their best February since 2015 amid several blowout earnings reports from Big Tech companies. Those improved earnings outlooks have prompted several Wall Street strategists to boost their year-end targets for the S&P 500.

History says stocks continuing to chug higher is the most likely outcome. Research from Carson Group's Ryan Detrick shows that the S&P 500 has started the year positive in January and February 28 times since 1950. The benchmark average was positive over the next 12 months in 26 of those instances. On average, when the first two months have been positive, the S&P 500 has delivered a return of 19.9% for the year.

While Detrick noted that this isn't an exact projection for a nearly 20% return this year, if the S&P 500 did rise by the average amount, it would end 2024 at 5,719.

Weekly Calendar

Monday

Economic news: No notable economic releases.

Earnings: Gitlab (GTLB), Stitch Fix (SFIX), ThredUp (TDUP)

Tuesday

Economic data: S&P Global US services PMI, February, final (51.4 expected, 51.3 prior); S&P Global Composite US composite PMI, February final (51.4 prior); ISM Services Index, February (52.9 expected, 53.4 prior); Durable goods orders, January final (-6.1% prior)

Earnings: Box (BOX), ChargePoint Holdings (CHPT), Crowdstrike (CRWD), Nio (NIO), Nordstrom (JWN), Ross Stores (ROST), Target (TGT), Vivid Seats (SEAT)

Wednesday

Economic data: Federal Reserve Chair Jerome Powell begins semi-annual testimony on Capital Hill; MBA Mortgage Applications, week ended March 1 (-5.6%); ADP private payrolls, February (+145,000 expected, +107,000 prior); Fed Reserve Beige Book January

Earnings: Abercrombie & Fitch (ANF), Campbell's (CPB), Foot Locker (FL), JD.Com (JD), Victoria's Secret (VSCO)

Thursday

Economic data: Challenger jobs cuts, year over year, February, (-20% prior); Unit labor costs, fourth quarter (+0.7% expected, +0.5% prior); Nonfarm productivity, fourth quarter (+3.1% expected, +3.2% prior); Initial jobless claims, week ending March 2 (215,000 prior)

Earnings: American Eagle Outfitters (AEO), Big Lots (BIG), BJ's (BJ), Broadcom (AVGO), Burlington Stores (BURL), Costco (COST), DocuSign (DOCU), Gap (GPS), Kroger (KR), Marvell Technology (MRVL), MongoDB (MDB)

Friday

Economic calendar: Nonfarm payrolls, February (+190,000 expected, +353,000 prior); Unemployment rate, February (3.7% expected, 3.7% previously); Average hourly earnings, month over month, February (+0.2% expected, +0.6% prior); Average hourly earnings, year over year, February (+4.3% expected, +4.5% prior); Average weekly hours worked, February (34.3 expected, 34.1 prior); Labor force participation rate, February (62.5% previously)

Earnings: No notable earnings releases.

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

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