NEW YORK (CNN/Money) - Much looms in the coming week that traders would normally devote their interest to: a rate-setting meeting by the Federal Open Market Committee, a slurry of fourth-quarter results from some of America's biggest companies, a set of key economic reports.

But in the week ahead it is war with Iraq, a possibility that seems more certain by the day, that will draw Wall Street's attention. U.N. arms inspectors are due to report their findings Monday, President Bush is slated to give his State of the Union address Tuesday evening, and a meeting between Bush and British Prime Minister Tony Blair at Camp David, Md., set for Friday, is being viewed in Washington circles as a council of war. (Click here for a lineup of the week's key events.)

People like to talk about what a great opportunity times of trouble are, quoting what Lord Nathan Rothschild said in 1810 about buying when the cannons were thundering and the like But when faced with the fact of war some of the bombast seems to falter. Stocks broke to lows not seen since October Friday as investors decided that they needed a good night's sleep more than they needed to be in the market on the off-chance that peace suddenly broke out.

"There was a growing feeling last year that war would be averted," said Salomon Smith Barney equity strategist John Manley. "That seems less likely now."

The market's first hurdle will be the U.N. weapons inspectors' report on Monday.

"That will probably be more important for its passing than for its result," said Prudential Securities political analyst Charles Gabriel.

Although Iraqi officials have obviously not been entirely forthcoming, chief inspector Hans Blix will likely say that his team has not uncovered any damning evidence, and that it needs more time. That sentiment will likely be echoed by the French, German and Russian governments, as well as by U.N. Secretary General Kofi Anan. But Gabriel thinks that President Bush, whose approval rating has slipped below 60 percent in recent polls, will not be swayed by such sentiment.

"It seems like the point of no return -- it's become politically unimaginable for Bush to pull back," Gabriel said. "If he were to back off now and concede to the French and Hans Blix and Kofi Anan, his numbers would dip into the 40s. And then they would eat him alive. The Democrats would eat him alive on the economy."

It will be the events that follow, the State of the Union address and the Camp David meeting, that show whether Gabriel's cynicism is justified. And until then there will be rumors galore -- Saddam is going to live in a dacha in Dharan; Colin Powell is about to have an Adlai Stevenson moment at the U.N.; we strike in February, when the moon is new -- rippling through the market.

Since nobody expects Federal Reserve policy makers, who meet Tuesday and Wednesday, to move on interest rates, nobody should care, right?

Not entirely so, thinks Merrill Lynch chief North American economist David Rosenberg, who will be focused on the Fed's policy directive, or bias. Since cutting the fed funds rate by a half point to 1.25 percent in November, the Fed has said that it sees the risks to the economy as "balanced." Given that much of the recent economic data has been on the weak side, Rosenberg thinks that in its statement following the meeting the Fed may say the economic risks are tilted toward weakness. That matters, Rosenberg thinks, because history has shown that when the Fed has had a bias toward easing, it almost invariably has cut rates later.

"If they change the risk assessment to weakness, I would be pricing in some nontrivial risk of a Fed rate cut in the months to come," he said.

In the realm of economics, the fourth-quarter gross domestic product report on Thursday poses another hurdle to the market. Economists have been steadily ratcheting down their GDP forecasts, particularly after the November report on trade came in much weaker than expected. Rosenberg, unlike some of his colleagues, doesn't think that fourth-quarter GDP growth will be negative -- but he thinks it will be only fractionally over the zero line.

That could be enough to get people worrying that the economy is dipping back into recession again.

The other economic reports for the week, like durable goods and the Chicago purchasing managers' index, could show improvement. Earnings will likely continue to top estimates. But with the potential for war with Iraq unfolding before them, it will be hard to draw to traders' eyes away from the headline news -- or to keep their fingers from hovering near the sell button.

• It will be earnings galore again. Click here for a look at the week's biggest reports.
• U.N. chief weapons inspector Hans Blix delivers his report to the Security Council Monday.
• The Senate Finance Committee holds confirmation hearings on John Snow, the Treasury Secretary-designate.
• December existing home sales come out Monday. Economists surveyed by Briefing.com expect they'll show the housing market remained robust, coming in at an annualized 5.55 million from November's 5.56 million.
• Durable goods orders for December come out Tuesday. Economists will be parsing it for any sign of pickup in equipment spending by companies. The consensus calls for orders to pick up by 0.5 percent after dropping 1.4 percent in November.
• The Federal Open Market Committee begins a two-day meeting on Tuesday, with its decision on rates due Wednesday afternoon. No change is expected in the fed funds rate.
• The Conference Board gives the January reading of its consumer confidence index Tuesday. Expectations are it climbed to 82 from December's 80.3.
• President Bush gives his State of the Union address Tuesday evening.
• The Commerce Department releases its first take on fourth-quarter gross domestic product Thursday. Economists expect the economy grew by 1 percent versus the third quarter's 4 percent.
• Thursday, the University of Michigan releases its final take on its consumer sentiment index for January. Economists expect it lifted to 84 from the previously reported 83.7.
• The Chicago purchasing managers' index, precursor to the Institute for Supply Management's nationwide manufacturing survey, gets released Friday. Economists expect it improved to 53 in January from December's 51.3.
• President Bush and British Prime Minister Tony Blair meet Friday at Camp David.