This week, the S&P 500 Index will have its spotlight on it as well as some of the top ETFs like VOO or SPY. The market is reacting to several important events such macroeconomic data.
The index is still at its highest level after a 30% increase from the lowest point in April of this year. This article examines the key catalysts for the S&P 500 Index, and the ETFs it includes.
Earnings Season
This week, the S&P 500 Index will most likely be influenced by the earnings season. The earnings season will reveal more information about Donald Trump’s tariff war.
JPMorgan Chase will release its results Tuesday, along with Wells Fargo Bank, BlackRock Bank of New York Mellon and State Street. The numbers are noteworthy because JPMorgan Chase is the most important American bank and BlackRock is by far the largest global asset manager.
Johnson & Johnson Morgan Stanley and Goldman Sachs are the other companies to watch. The top three companies are Netflix, GE Aviation and American Express.
Analysts predict that S&P 500 Index revenue will grow by less than 5%. This is the lowest growth rate since Q4’23. This weak number may be a sign of a bottom. That’s why the index has been surging in recent months.
US inflation data
This week’s US inflation figures are also a major catalyst. They will be released on Wednesday. The Federal Reserve uses inflation as part of its dual mandate.
US non-farm payroll numbers were released earlier this month. They showed the creation of over 147k new jobs by the US economy in June. The unemployment rate also dropped from 4.1% to just 4.1%.
The Federal Reserve is likely to maintain its hawkish outlook due to the strong employment report. If the US releases strong inflation data, this stance is likely to be confirmed.
The economic report is expected to reveal that consumer prices rose by 2.5% as companies adjusted their prices in response to Donald Trump’s tariffs.
An increase in inflation could lead the Federal Reserve to adopt a hawkish attitude. Donald Trump would be even more frustrated with the Fed, as he had called for a reduction of 300 basis points. Bloomberg analysts stated:
We think that the price increase composition will probably resemble last month’s report. Only modest pass-through of tariffs in goods categories is expected to be offset by continued weakness in services. The scraped data shows a mixed image, as there is a firming of categories such as appliances and furniture but deterioration in used cars and airfares.
Trump Trade War
Donald Trump’s ongoing trade war is another notable factor that has impacted the S&P 500 Index, and top ETFs like SPY, and VOO. Trump has sent letters threatening more tariffs to his biggest trading partners.
He has threatened to impose a 30 percent tariff on goods coming into the US via the European Union or Mexico. Other countries such as Japan, Brazil and Canada have also been targeted by him.
Analysts believe these threats will be used as bargaining chips in the future negotiations. A trade war that escalates would have a negative impact on the S&P 500 Index.
The S&P 500 Index is likely to continue its upward trend this week, as it currently has a positive momentum.
The post, Top 4 catalysts of the S&P 500 Index ETFs VOO and Spy may change as new information becomes available.
