S&P 500 Index had a big jump in recent weeks, reversing some of its losses from earlier this year after Donald Trump announced his tariffs. It initially fell to $4,840, but has since rebounded 17%, reaching $5,660. This is its highest level in over two years.
The top S&P 500 Index Catalysts
In the last few weeks, there have been many catalysts for the S&P 500 Index. Most important has been the growing hope that US and other countries will come to a trade agreement, particularly China.
Donald Trump has praised the opening day of the talks in Switzerland. The potential agreement will result in lower tariffs, and China’s commitment to purchase more US products. This is especially true for the agricultural and energy sectors.
Trump hopes China will also lower its nontariff barriers including theft of intellectual property. It is still clear that more talks will be needed to reach a deal. Scott Bessent has said that it will be at least three-years.
Federal Reserve is another catalyst, as it left rates at 4.50% in last week’s meeting. The Federal Reserve left interest rates unchanged at 4.50% in its meeting last week, and indicated that they will adopt a “wait-and-see” attitude before making the next cut.
The Federal Reserve would be able to cut interest rates sooner if there was a trade agreement between the US with other countries, as this would reduce inflation.
The index also has not reacted strongly to this earnings season. FactSet data shows 90% of the companies included in S&P 500 Index reported earnings. The combined earnings of these companies grew by 13.4%. This is the second consecutive quarter with double-digit growth.
Analysts believe the earnings are temporary, as the tariffs reciprocal were not implemented until the second quarter.
Walmart, Applied Materials and Cisco System are some of the S&P 500 Index companies to keep an eye on as the earnings season comes to a close.
Walmart (WMT)
Walmart’s stock has performed well over the last few weeks, as its price has risen from $80 to $97. The recovery of Walmart stock mirrored that of the other S&P 500 Index companies.
Analysts anticipate that Walmart will report a 2.85% increase in revenue for the third quarter, to reach $164.5 Billion. They hope that revenue will reach $702 billion this year, an increase of 4.10% over the previous year. Walmart’s average stock forecast for this year is $107, a rise from $96.
It’s not too late to buy Walmart shares as they hit a new record. Here’s what the experts say
Applied Materials (AMAT)
Applied Materials will also be a company worth watching when it announces its financial results this Thursday. The AMAT stock is trying to recover after hitting a low of $123.95.
Applied Materials is a leading semiconductor company that will likely report revenues in the $7.12-billion range, a 7.12% rise from last year’s same time period. Annual revenues will be $28.7 Billion, up 5.8% on last year. Analysts predict that the AMAT share price will jump from its current level of $155 to $201.
Read More: Applied Materials Stock: Is AMAT a bargain before earnings?
Cisco Systems (CSCO)
Cisco Systems’ stock has increased from $52.15 to $60 in just a few months. Its earnings will also have an effect on the price.
Its network solutions business is big enough to benefit from AI’s macro-theme. Analysts believe that the company’s business performed well during the quarter, as revenue increased by 10%. Cisco’s stock is expected to reach $67 by analysts, an increase of $59.
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