Investors focused their attention on the monetary policies and Nvidia’s earnings last week, which caused the Dow Jones, S&P 500 and Nasdaq 100 indexes, as well as their respective ETFs, to move sideways. S&P 500 Index fell to $6460, from the high for this year of $6500.
The Dow Jones Index traded at $45,545. Meanwhile, the Nasdaq 100 dropped from $23,965 down to $23,415. The article examines the most important catalysts of the indexes, as well as the ETFs such VOO, QQQ, and DIA.
US nonfarm payrolls data
Data on US non-farm payrolls, scheduled for Friday, is likely to be the most significant catalyst in the Dow Jones, S&P 500 and Nasdaq 100 indexes.
The report will give more information on the state of the American economy, and help determine the Federal Reserve’s next move.
Jerome Powell (the Fed chair) hinted in a statement made at the Jackson Hole Symposium that interest rates will be cut by the bank this September due to the weakening of the labor market.
Last month’s report revealed that only 73,000 new jobs were created in July. This was much less than analysts expected. Based on recent events, this figure is likely to be further downgraded. The revision will be of interest to traders.
ETFs and indices are also affected by the rate of unemployment. Analysts predict that unemployment will rise to 4,3% in August, as the economy creates 78k new jobs.
Most analysts expect that the Federal Reserve would cut rates in September if there is a weak employment report. Stock markets tend to perform well when interest rates are cut by the Fed.
Tariffs of Donald Trump are in flux
Another major factor for Dow Jones, S&P 500 and Nasdaq 100 are the recent appeal decisions on Donald Trump’s tariffs. A bench ruled that Trump’s tariffs were illegal in most cases, which would be welcomed by the stock market.
The court upheld the tariffs, but the Trump administration filed an appeal. Analysts believe the case may go to the Supreme Court which could side with Trump’s administration.
Earnings of corporations
Earnings from corporations will also be a minor factor in the indexes and ETFs. Only a few companies, such as Carnival, McCormick and Nike will release their results.
Recent earnings were very successful. FactSet reports that 98% all S&P 500 companies have released their earnings. Eighty-one percent of these companies published a higher than expected earnings, and the growth in earnings was 11 %. It was the third consecutive quarter with double-digit growth.
Economic data for the top 10
Macro data coming from other countries and the United States will also be a minor factor in the US stock exchange. Top data will include the manufacturing and services PMI final, JOLTs jobs vacancies and ADP data.
The impact of these data on the stock markets will be minimal, as all attention will be focused on non-farm payrolls (NFP).
This post may change as new information becomes available.
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