In the last few weeks, the Dow Jones, Nasdaq 100 and S&P 500 indexes moved in a sideways direction as recent momentum stopped. S&P 500 Index has remained at $6000, which is its highest level since February 24 and 24% higher than its lowest point in this year.
The Nasdaq Index is up 31% since its low point of the year. Dow Jones Index was trading at $42,765, an increase of 16% over the YTD Low. The article examines the three biggest catalysts of these indices in this week.
Trade talks between the US and China
This is due to the forthcoming trade talks in London between China and the US. The meeting between Donald Trump of China and Xi Jinping was planned during a telephone call last week.
This comes just a couple of weeks after both sides met in Switzerland to reach a number of important agreements. They agreed, for example to reduce tariffs by double digits.
Recent events, however, have seen China and the US accusing each other of failing to fulfill the agreement. China accuses US of provocation, such as suspending its students and imposing export controls on chip.
China has been accused by the US of blocking shipments of rare-earth products used in manufacturing.
The Dow Jones, S&P 500 and Nasdaq 100 will therefore react to the outcome of any meeting. If the two parties make progress, and if there is a possible meeting between two presidents, they will surge.
This would be a notable achievement, as the US and China represent some of the largest trading partners around the globe.
There are indications that China’s business is shifting away from America, which has grown more aggressive. As an example, China’s airlines no longer buy Boeing jets and plan to purchase 500 Airbus jets.
US inflation data
Next week’s US inflation figures will be a key factor for Dow Jones, Nasdaq 100 and S&P 500.
The data is expected to reveal that the inflation rate has increased a little, as the consumer price index (CPI), which measures the overall cost of living in the country, rose to 2,5%.
Stocks will fall if there are signs of inflation rising, as this will indicate that the Federal Reserve is likely to maintain its hawkish stance for some time. Donald Trump will be furious, as he has called for a ‘full-point’ cut and argued that the ECB had slashed rates tenfold.
US stocks perform well when Federal Reserve cuts interest rates, or signals it is going to do so. CPI comes just after US jobs data that showed a healthy economy.
Trump, Musk, BBB, corporate earnings and more
Other minor factors that will affect the US indexes are corporate earnings, Trump-Elon Musk relationships, and The Big Beautiful Bill. Adobe ,Oracle, Chewy, GameStop, J.M Smucker, Stitch Fix, Core & Main, J.M Smucker and Core & Main are the only companies who will be releasing their earnings.
The stock market will react as well to the current Trump-Musk relationship, which reached a new low in one week. Musk is pushing Republicans harder to reject the Big Beautiful Bill, which ends EV mandates while increasing government debt.
Elon Musk is at risk of losing a great deal, as his businesses have won government contracts worth billions. There is therefore a possibility that Elon Musk will make peace. Stock market will benefit from a deal between these two.
The post, Top 3 catalysts of the Dow Jones, Nasdaq 100 and S&P 500 for this week, may change as new information is revealed.
