American stocks held steady and hit their all-time high last week, with all equities adding over $14 billion in value this cycle. The Vanguard S&P 500 ETF (VOO) jumped to a record high of $604, while the Schwab US Dividend Equity ETF (SCHD) jumped to $27.
This article highlights some of the top catalysts to drive the VOO, SCHD, and other ETFs this week.
US retail sales data
The first main catalyst for the VOO and SCHD ETFs will be the upcoming retail sales numbers on Tuesday. These are useful numbers, which provide hints on the health of the American economic and consumers.
Economists expect the data to show that the headline retail sales rose by 3.2% YoY after rising by 3.9% in the previous month. A slowdown in retail sales will likely be attributed to Donald Trump’s tariffs, which have led to higher inflation in the past few months.
The other important economic data to watch will be the US import and export prices, which will provide information about how the tariffs are affecting the price of goods at the ports.
Read more: US holiday sales expected to rise a modest 2.9–3.4%, Deloitte says
Federal Reserve interest rate decision
The most important catalyst for the VOO and SCHD ETFs this week will be Wednesday’s Federal Reserve interest rate decision.
This decision will be important because ir will be the first one that the bank slashes interest rates this year.
Odds of a rate cut in this meeting have jumped in the past few weeks after the US published weak jobs numbers. A report showed that the economy added just 22,000 jobs in August, while the unemployment rate rose to 4.3%.
Another report released last week showed that inflation was largely in line with what analysts were expecting. The headline Consumer Price Index (CPI) rose to 2.9%, while the core figure rose to 3.2%.
In theory, a Fed cut would be highly bullish for the stock market. However, there is a risk that the rate cut has already been priced in by investors. This, in turn, could be a ‘sell-the-news’ event as JPMorgan analysts warned. RBC Capital Markets analysts have warned of potential buyers fatigue.
Corporate earnings
The earnings season has ended, and, according to FactSet, the aggregate earnings growth in the second quarter was about 11%, higher than what analysts were expecting.
Oracle, a top technology company, was the standout firm during the earnings season as it showed that its RPO jumped by 360% in the last quarter to $455 billion.
There will be a few important earnings this week. FedEx, Lennar, Darden Restaurants, and FactSet will publish their latest results on Thursday.
Lennar is watched closely because it is one of the biggest housebuilders in the United States. And with mortgage rates falling, investors will want to see whether they are translating to higher sales.
FedEx results provide information about the health of the American economy as it is one of the top players in the delivery industry. General Mills and Cracker Barrel will publish their results on Wednesday this week.
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