The Dow Jones Index futures remained in a tight range on Monday morning as investors waited for a highly eventful week in which Donald Trump may attack Iran and Kevin Warsh may deliver his first interview as the shadow Federal Reserve Chairman. It was trading at $49,000, a few points below the all-time high of $49,630.
Dow Jones Index to React to US Earnings Dump
The main catalyst for the Dow Jones Index this week will be corporate earnings from hundreds of the biggest American companies, including popular names like Amazon, Google, PayPal, AMD, and AbbVie.
These results come a week after top American companies like Tesla, Microsoft, Meta Platforms, Visa, and Mastercard released their numbers. Data compiled by FactSet shows that the blended earnings growth by S&P 500 Index so far is 11.2%, higher than the expected 8.3%.
More companies are also issuing strong forward guidance, which is a sign that they have learned to adapt to Donald Trump’s tariffs.
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Donald Trump’s Attack on Iran
The other major catalyst for the Dow Jones will be on geopolitics as Donald Trump remains under pressure to attack Iran to execute a regime change.
Iran has made it clear that it is open to nuclear talks with the United States. However, there are signs that the new demands from the United States have become untenable. They include giving away its enriched uranium, giving up its civil nuclear program, and ending support for its proxies.
Iran has also reiterated that it will respond to any attack from the United States, a move that would boost crude oil prices and stimulate inflation in the US and other countries. A new war in the Middle East would be bearish for the stock market.
Potential Kevin Warsh Interview
The other major catalyst for the Dow Jones Index this week will be a potential media interview of Kevin Warsh, who has now become the shadow Federal Reserve Chairman.
Chances are that Warsh will be interviewed by one or more media channels like CNBC and Bloomberg. His interview will likely provide more information about what to expect when he becomes the Fed Chair.
US Non-Farm Payrolls Jobs Data
In line with the Federal Reserve, the US will publish the latest non-farm payrolls (NFP) data, which will come out on Friday this week.
Data compiled by Investing shows that economists expect the data to show that the economy created 70k jobs in January, as the unemployment rate remained stuck at 4.4%.
While these numbers are important, chances are that they will not change the Federal Reserve’s view on interest rates. Fed officials believe that interest rates are in a good place since inflation has stabilized.
The Dow Jones Index will also react mildly to the upcoming European Central Bank (ECB) and Bank of England (BoE) interest rate decisions, which will happen on Thursday this year.
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