Last week, the Nasdaq Index, and exchange traded funds like Invesco QQQ rose to new highs as earnings season progressed and concerns over a possible trade war diminished.
The stock jumped sharply to $23,610 from its low for the first half of this year of $16,520. These are the main catalysts for its performance in this week.
US inflation data
This week’s US consumer price data will be the first major catalyst of the Nasdaq 100 Index. The next Federal Reserve rate decision will be affected by this closely-watched report.
Analysts estimate that headline consumer prices rose to 2.8% from 2.7% last month, and the core price index reverted to 3.0%.
These numbers, if accurate, will affect the Federal Reserve’s average forecast. Following the non-farm payrolls data released last week, some Federal Reserve officials are warming up to the idea that interest rates could be cut in September. Lisa Cook described it as “a turning point”.
The Federal Reserve may find it hard to reduce interest rates if the US is moving into stagflation. This could be due to a deteriorating US labor market, and high inflation.
When the Federal Reserve lowers interest rates, the Nasdaq100 Index and QQQ ETF perform well.
Earnings of top corporations
Another key driver for both the Nasdaq 100 Index (and QQQ) is the end of the earnings season. The majority of constituent companies already released their earnings.
FactSet shows that 90% of the S&P 500 companies have reported. Analysts had expected earnings to grow by 11.8% in the second quarter, but the actual growth was higher.
A concern about Donald Trump’s tariffs led to a less-than-5 percent average growth in earnings. The growth is therefore more than twice what analysts expected.
CoreWeave’s role in the AI sector will make it one of the most important tech stocks this week. It offers top AI companies access to its data centers.
Applied Materials will also publish their results Thursday. Analysts expect AMAT to report earnings of $2.36 per share.
Cisco, one of the largest wholesale companies, is scheduled to release their results on Tuesday. Venture Global, Sea Limited and Tencent are also companies to keep an eye on.
Trump and Putin Meeting
A meeting between Donald Trump, Vladimir Putin and others in Alaska is also being closely watched. It is important to stop the war in Ukraine that has caused millions of people to be displaced and thousands have died.
This meeting is hoped to bring peace in this region. The end of the meeting and the possible scrapping of certain Russian tariffs could help lower energy costs and inflation. This may lead to a boost in the Nasdaq100 Index.
US Retail Sales Data and Fed Speak
Retail sales in the US are another key factor for Nasdaq 100 Indexes and QQQ ETFs. The data shows that retail sales have slowed down from 0.6% in the first quarter to just 0.5% this year due to Donald Trump’s new tariffs.
US also will publish latest import and export prices, as well as manufacturing and industrial production and consumer expectations. These numbers, like the inflation report will affect what the Federal Reserve decides and when they start to reduce rates.
When the Fed cuts interest rates, or signals it is going to do so, Nasdaq does well. Tom Barkin, a Fed official who will speak this week will give hints as to when the bank is going to cut.
The post Nasdaq 100 Index Top Catalysts and QQQ ETF this Week may change as new information is released.
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