The Standard & Poor's 500 has risen 3 percent over the past three weeks, as investors have largely been willing to forgive a flurry of soft economic data due to harsh winter weather.
The main focus will be Part Two of Federal Reserve Chair Janet Yellen's semi-annual monetary policy testimony before the Senate Banking Committee on Thursday.
Ironically, Yellen's congressional testimony before U.S. lawmakers was rescheduled after a Senate panel previously canceled the original hearing date due to a recent snowstorm in Washington, D.C.
Yelena Shulyatyeva, an economist at BNP Paribas in New York, said investors and economists will pay attention to Yellen's answers on "questions about the weather, how much does she think the weather is impacting economic activity and how much will (the Fed) pay attention to that."
Market participants will also monitor Yellen's statements for any signs regarding the central bank's plans as it tapers its stimulus measures. As the U.S. unemployment rate nears the Fed's 6.5 percent target, the debate has grown over whether interest rates should be raised.
St. Louis Federal Reserve Bank President James Bullard said on Friday that the U.S. economy is headed for a good year of growth, and he expects the central bank to continue to pare its massive bond-buying stimulus.
THE CONSUMER CONFIDENCE GAME
Next week's economic calendar includes consumer confidence, new home sales and several other reports on the housing market, durable goods orders, the preliminary data on gross domestic product and the final February reading on consumer sentiment from Thomson Reuters and the University of Michigan.
While the housing data is likely to be discounted as a result of weather issues, the consumer confidence data may still provide insight to investors as to whether economic growth remains on track.
"If you look at consumer confidence, looking past the weather cycle of indicators, we find the economic outlook of consumers has not changed materially despite all the other indicators that may suggest otherwise," said Anastasia Amoroso, global market strategist at J.P. Morgan Funds in New York.
"So if consumer confidence comes in as the preliminary reading did, that suggests the end-user demand for goods and services did not fall off a cliff, but rather has been deferred due to weather."
Earnings season will also wind down, with retailers in focus as the weather has added to the sector's many other challenges.
Retail earnings set for release next week include Home Depot Inc, Lowe's Companies Inc, Target Corp, Macy's Inc, TJX Companies, JC Penney Company Inc , Best Buy Co Inc and Gap Inc.
Of the 441 companies in the S&P 500 that had reported earnings through Friday, 65.3 percent have reported earnings above analysts' expectations, slightly below the 67 percent rate for the past four quarters, but above the 63 percent average since 1994.
RESISTANCE, GDP AND POLITICS
Even if the data falls short of expectations and is downplayed once again by investors, a lack of catalysts may prevent the benchmark S&P 500 from convincingly breaking its all-time intraday high of 1,850.84 set on Jan. 15. That level has acted as resistance.
"1,850 seems to be a level where enough natural selling comes out and it doesn't have the 'oomph' to take it up and through, and every time that happens, it seems to back off a little bit," said Ken Polcari, director of the NYSE floor division at O'Neil Securities in New York.
"If the market breaks down, (investors) are happy to jump in and support. But if the market tries to break out, there are plenty of people willing to take a little off the table because they are still looking for the market over the next couple of months to be volatile to the downside."
One potential hurdle to continued gains will come the day after Yellen's testimony with a preliminary reading on gross domestic product. The data is expected to show growth of 2.5 percent, down from a previous reading of 3.2 percent.
"The GDP revisions, that will be big," said Jeffrey Cleveland, chief economist at Payden & Rygel in Los Angeles.
"You could argue that some of that is priced in, or a lot of it is priced in, but the sticker shock will be interesting, especially given the first quarter is tracking below the fourth quarter."
All told, the stock market could also be roiled again by political turmoil as investors monitor unrest in Venezuela and Ukraine. While those countries represent a small portion of the global economy, further deterioration could dent sentiment.