The S&P 500 and Dow Jones have moved sideways in the past few days and are both hovering near their all-time highs. The S&P 500 trades at 7,711 points, down from a record high of 7,820, while the Dow Jones has pulled back to 53,565 points, down from a record high of 54,753. This article looks at the top three catalysts that may move these blue-chip indices this week.
Broadcom and Oracle Earnings
The S&P 500 and Dow Jones have wavered during this earnings season, which showed that most companies continued growing in the second quarter. According to FactSet (NYSE:FDS) the average earnings growth was over 50.4%, much higher than what analysts were expecting.
Top companies in these indices like Nvidia (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT), and Alphabet (NASDAQ:GOOG) have published strong financial results this month.
This week, focus will be on Broadcom (NASDAQ:AVGO) and Oracle (NASDAQ:ORCL), two of the biggest players in the artificial intelligence industry. Analysts expect these two companies will release strong financial results, with Broadcom’s revenue expected to come in at $29.4 billion, up by 84% YoY. Oracle’s revenue is expected to come in at $19.13 billion, up by 28% YoY.
In addition to these two, other top companies like Palo Alto Networks, Dell Technologies, Medtronic, MongoDB, Snowflake, Hewlett Packard Enterprise, and Ciena Corporation.
US Nonfarm Payrolls Data
The Dow Jones and S&P 500 indices will also react to the upcoming nonfarm payrolls (NFP) that comes out on Friday. These numbers are expected to provide more color on the state of the US economy.
Economists polled by Reuters expect the upcoming report to show that the economy added 84k jobs this month after losing 23k in July.
More jobs numbers to watch will be the JOLTs vacancies report and the ADP private payrolls data. These numbers will come a few days after Jerome Powell delivered his first statement at the Jackson Hole Symposium in Wyoming. His statement was hawkish, leading traders to predict that the bank will hike interest rates in the December meeting.
US-Iran War and the Bond Market
US stocks will also react to the new developments on the US-Iran war. While kinetic action has ended, there is still the risk that Iran will restart it, especially if the US sanctions tighten. A resumption to fighting will lead to higher oil prices and more pressure on the US stock market.
At the same time, stocks will also react to any new developments on the bond market as the US public debt nears the $40.1 trillion milestone. While the 30-year treasury bond yield has stabilized, there is a likelihood that its volatility will resume as the US releases the jobs reports.
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