The S&P 500 Index and its top ETFs like the popular VOO and SPY have been in a strong surge recently. They jumped in the last seven consecutive weeks and settled near their all-time highs. This article explores some of the top stock market news that will drive them this week.
S&P 500 Index to react to key corporate earnings
The SPX Index, VOO, and SPY ETFs will react to the upcoming corporate earnings by some of the biggest companies in the United States.
All focus will be on the upcoming NVIDIA results that comes on Wednesday this week. These are crucial numbers for the S&P 500 Index because NVIDIA accounts for 7.58%. As such, any significant performance will always have an impact on its performance.
Analysts are upbeat about the upcoming results, with the average revenue estimate being $79 billion, up by over 78% from the same period last year. They also expect that the company will boost its forward estimate because of the recently announced Vera CPU chips and the fact that the US has now allowed ten Chinese companies to start buying H200 chips.
Some more important American companies will also publish their financial results this week. For example, top retailers like Walmart, Home Depot, Lowe’s, and Target will release their numbers this week. These results are usually important because they give color on the state of the American consumer.
Other important earnings to watch will be Analog Devices, Deere, Workday, Zoom, Ralph Lauren, and Take-Two Interactive.
FactSet data shows that corporate earnings are thriving, with the earnings growth being about 27.7%, the highest point since Q4’21.
Federal Reserve minutes
The S&P 500 Index will also react to the upcoming Federal Reserve minutes, which will come out on Wednesday. These minutes will provide more color on the last meeting, in which the bank decided to leave interest rates unchanged between 3.50% and 3.75%.
While these minutes are important, chances are that their impact will be limited after the recent macro numbers. For example, the recently released consumer inflation report showed that the consumer price index (CPI) jumped to 3.8%, while the producer price index jumped to 6.0%.
Before that, another report showed that the unemployment rate remained at 4.3% as the economy created over 115k jobs. Therefore, with numbers like this, most analysts predict that the Fed will not cut interest rates any time soon. This explains why US bond yields have jumped, with the ten-year rising to 4.5% and the 30-year crossing the 5% level for the first time in years.
US-Iran war
The other important catalyst for the S&P 500, VOO, and SPY is any new details on the US-Iran war. This war remains in a ceasefire, which President Trump described as being in a life support.
There is a risk that the war will restart in the near term. Alternatively, the ongoing ceasefire may continue for longer, meaning that the Strait of Hormuz is still closed.
Therefore, a resumption of war or the continuation of the ceasefire means that oil prices will continue rising in the near term. Brent and the West Texas Intermediate (WTI) have all jumped to $107 and $105, respectively.
Key US macro data
Finally, the US stock market will react mildly to some important macro data and Fed events this week. The US will release the latest pending home sales report on Tuesday, oil inventories on Wednesday, building permits and housing starts on Thursday, and consumer confidence on Friday.
On top of that, several Federal Reserve officials like Christopher Waller, Michael Barr, Anna Paulson, and Cheryl Venable will talk. It is likely that Kevin Warsh will become the Fed Chair this week after he was sworn in last week.
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