After turbulence, traders could stay close to home in week ahead

Traders work on the floor of the New York Stock Exchange.
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Traders work on the floor of the New York Stock Exchange.

The stock market could turn back to domestic matters in the coming week, and some strategists say it may like what it sees.

After days of dodging foreign headlines on the tanking Chinese stock market and Greece's difficult debt talks, traders will get a heavy dose of Fed speak, corporate earnings and U.S. economic data. The U.S. central bank's chair, Janet Yellen, testifies twice before Congress in her semiannual appearance on the economy, going before House and Senate committees Wednesday and Thursday, respectively.

"Everyone knows (Yellen) is dovish. Greece is on the back burner. China, who knows? It's all about the earnings now," said Peter Boockvar, market strategist at Lindsey Group.

Second-quarter earnings season kicks off with the first cluster of major reports Tuesday including JPMorgan Chase and Wells Fargo. Google, Goldman Sachs, Citigroup, Intel, and General Electric also report during the week.

Banks, which typically dominate the first week of earnings, are expected to be standouts, with easy comparisons due to charges taken last year. Earnings for the S&P financials sector are expected to be up 14.9 percent, according to Thomson Reuters.

Read MoreBanks to kick off another sloppy earnings season

"We look at the earning season and think this is likely to be the trough for earnings in this cycle," said Julian Emanuel, equity and derivatives strategist at UBS. "Consensus is looking at negative 4 percent (for the S&P 500). We think it comes in closer to flat. You combine that with the notion that the U.S. economy is a self-sustaining ecosystem—70 percent of S&P 500 revenue is domestically derived, and 80 percent of the Russell 2000's revenue is domestically derived."

While earnings season is getting good buzz, some analysts worry that a firmer dollar and the plunge in oil prices could show up in company comments, as possible negatives for the third quarter. For the second quarter, energy earnings are expected to be down 60.5 percent, according to Thomson Reuters.

Read More Earnings surprises may spark market rebound

"The banks have very easy comparisons," said Boockvar. "Tech is not going to be good. There are pockets of serious weakness. When you look at the PC area, there's trouble there. ... This earnings season's no layup."

Just the promise of a resolution in Greece's debt negotiations and stabilization in Chinese mainland markets rallied stocks Friday. But China will remain a focus in the week ahead, as a slew of Chinese economic reports are expected and traders continue to watch its markets. Trade is released Monday, while retail sales, industrial production and GDP are Wednesday.

The Shanghai stock market was 5 percent higher for the week, after rallies Thursday and Friday erased losses earlier in the week.

The S&P 500 swung wildly day to day, but finished the week flat with less than a 0.01 percent loss, at 2,076. The Dow was up 0.2 percent for the week at 17,760.

In the U.S., there's a heavy economic calendar in the week ahead, with retail sales Tuesday and the Empire State and Philadelphia Fed surveys Wednesday and Thursday, respectively. Industrial production is Wednesday and CPI and housing starts are Friday.

Read More Fed Chair Janet Yellen: Interest rate hike to come 'later this year'

But Yellen will be the key event when it comes to traders, who are fixated on divining the course of interest rates. According to RBS data, on Friday the expectations in the futures market for a first Fed rate hike moved from March 2016 to January 2016, as markets reacted to positive sentiment on Greece and Yellen's comments.

Yellen reiterated that the Fed could raise rates this year, and that it expects the economy to improve. While she made the same statement in May, the market's expectation for the timing of the first rate hike shifted to next year because of uncertainty surrounding Greece's potential exit from the euro and China's market meltdown.

Many economists see the first rate increase in September but futures only show a 30 percent expectation for a hike then.

In the Treasury market, yields on the short end of the curve moved higher Friday as a result of her comments, and the10-year was above 2.41 percent in late-afternoon trading.

Tom Simons, money market economist at Jefferies, said he expects to hear more of the same from Yellen on Wednesday and Thursday, and not that much concern about Greece. "She is never going to be super-specific on her stand on policy. The Fed has made it clear they're going to be data dependent. They don't know what the data's going to do so they don't know how they're going to react," he said.

Read MoreHow China might have given itself a black eye

Stephen Stanley, chief economist at Amherst Pierpont, said Yellen's comments Friday reflected her own view and when she speaks before Congress, she will reflect the views of the Federal Open Market Committee.

"My takeaway is that Chair Yellen is moving closer to the comfort level necessary to support liftoff, but she is of course not there yet. I sense that she feels better about the labor market situation and the inflation situation than she did in May," he wrote in a note.

Stanley said Yellen seems confident about a rate hike this year, even though the data between now and the September meeting will be deciding factors for the Fed's rate decision.

He said the FOMC needs to see a bounce in second-quarter growth, continued improvement in the labor market and inflation moving toward a 2 percent pace.

If inflation continues at the current rate of core CPI—2.4 percent annualized—or the 1.7 percent pace of the PCE deflator, that should be enough for a hike if GDP is strong enough and labor continues to improve, he added.

Traders, therefore, will be keeping a close eye on Friday's consumer price inflation data.

What to watch

Monday

2:00 p.m.: Federal budget

Tuesday

Earnings: JPMorgan Chase, Wells Fargo, Johnson and Johnson, CSX, Yum Brands, Fastenal, Commerce Bancshares

6:00 a.m.: NFIB small-business survey

8:30 a.m.: Retail sales

8:30 a.m.: Import prices

10:00 a.m.: Business inventories

8:15 p.m.: Kansas City Fed President Esther George

Wednesday

CNBC's Delivering Alpha conference

Earnings: Bank of America, BlackRock, US Bancorp, Delta Air Lines, PNC Financial, Intel, Netflix, ASML Holding, Wintrust Financial

8:30 a.m.: PPI

8:30 a.m.: Empire State survey

9:15 a.m.: Industrial production

10:00 a.m.: Fed Chair Janet Yellen semiannual testimony before House Financial Services

12:25 p.m.: Cleveland Fed President Loretta Mester on economic outlook

2:00 p.m.: Beige book

3:00 p.m.: San Francisco Fed President John Williams on outlook

Thursday

Earnings: Citigroup, Goldman Sachs, Google, Sclumberger, Advanced Micro, Philip Morris, UnitedHealth, Blackstone, Charles Schwab, KeyCorp, Sherwin-Williams, Taiwan Semiconductor, Domino's Pizza, Mattel

8:30 a.m.: Initial claims

10:00 a.m.: Philadelphia Fed survey

10:00 a.m.: NAHB survey

2:30 p.m.: Fed Chair Yellen semiannual testimony before Senate Banking Committee

4:00 p.m.: TIC data

Friday

Earnings: General Electric, Honeywell, Kansas City Southern, JB Hunt, Synchrony Financial, WW Grainger

8:30 a.m.: CPI

8:30 a.m.: Housing starts

10:00 a.m.: Consumer sentiment