The S&P 500 and Dow Jones indices have done well this month as investors played down the impact of the ongoing US-Iran war.
The Dow Jones Index jumped to $49,230 and is slowly nearing its all-time high of $50,000, while the S&P 500 has soared to a record high. This article explores some of the top catalysts for the two indices this week.
S&P 500 and Dow Jones Indices to React to Corporate Earnings
The most important catalyst for the S&P 500 and Dow Jones indices is the upcoming corporate earnings reports from the largest companies in the United States.
Companies like Microsoft, Google, Apple, Amazon, and Meta Platforms, which are collectively worth over $13 trillion, will publish their financial results this week. These results will provide more color on their AI investments and what to expect this year.
FactSet data shows that 28% of companies have published all their earnings, with a blended earnings growth rate of 15.1%. Other top companies to watch this week are Qualcomm, ADP, General Dynamics, Eli Lilly, Mastercard, and Caterpillar.
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Central Bank Interest Rate Decisions
The third main catalyst for the Dow Jones and S&P 500 indices will be central bank decisions by some of the world’s top banks.
The Bank of Japan (BOJ) will be the first one to go on Tuesday, with economists expecting it to leave interest rates unchanged. Another BoJ rate hike may affect global stocks.
The most important central bank to watch will be the Federal Reserve, which will publish its decision on Wednesday. This will likely be Jerome Powell’s final decision as chair, and traders will watch his statement to see whether he will continue serving as the Fed governor or step down.
Other central banks to watch include the Bank of England (BoE), the Bank of Canada (BoC), and the European Central Bank (ECB).
The US will also publish important macro data, including consumer confidence, GDP, housing stats, and building permits.
US-Iran Ceasefire
Meanwhile, the Dow Jones and S&P 500 indices will react to new developments in the ongoing US-Iran war, where a contentious ceasefire is ongoing.
Iran has been adamant that it will not talk to the US as long as the blockade continues. As a result, its officials refused to travel to Pakistan last week. In a statement on Saturday, Trump said that his representatives would not attend another session even though Iran had not signaled that it would attend.
As a result, crude oil prices have continued to rise, and this trend may persist in the foreseeable future, potentially derailing the ongoing stock market rally.
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