The S&P 500 Index had a mixed performance last week as investors reacted to corporate earnings by most Magnificent 7 companies and the Federal Reserve interest rate decision.
Most big-tech companies, especially Amazon, published strong financial results, helped by the artificial intelligence tailwinds. This pushed its stock to a record high, even as the company announced thousands of layoffs.
The S&P 500 Index was ended the week at $6,840, down slightly from the all-time high of $6,924. This article explores some of the top catalysts for the index and its ETFs, like SPY and VOO this week.
S&P 500 Index to react to corporate earnings
One of the top catalysts for the S&P 500 Index and its ETFs like the VOO and SPY, is the US earnings season, which will continue this week.
Data compiled by FactSet shows that 64% of all companies in the index have already published their financial results. 83% of them have released positive earnings EPS, while the average earnings growth rate for these firms is 10.7%, higher than what analysts were expecting.
If the 10.7% growth rate is the actual figure, it will mark the fourth consecutive quarter of double-digit earnings growth.
Many companies in the S&P 500 Index will publish their financial results this week. Some of the most notable ones will be companies like AMD, Shopify, Uber, Amgen, Arista Networks, and Pfizer.
Other top companies that will release their numbers this week will be Spotify, McDonald’s, Qualcomm, Robinhood, Arm Holdings, Apollo Global, KKR, ConocoPhillips, and Airbnb.
AMD and Qualcomm will be notable companies to watch this week because of their presence in the AI industry. Qualcomm made headlines last week after revealing its AI chip that may rival those made by AMD and Nvidia.
KKR and Apollo Global will be in the spotlight because of the ongoing jitters in the private credit industry. Warner Bros. Discovery will also be watched closely because of the ongoing acquisition news.
Government shutdown continues
The other notable catalyst for the S&P 500 Index is that the US government shutdown may end soon. While Donald Trump and Democrats have maintained hard positions, political risks are rising.
The main political risks revolve around food stamps, airports, and the Affordable Care Act enrolments. This urgency could push the two sides to the negotiating table, which would be bullish for the stock market.
Key economic data
The S&P 500 Index will also react mildly to some notable economic numbers from the US that will help to set the tone for the Federal Reserve.
The most important one will come out on Wednesday when ADP publishes the latest jobs report. This will be an important report as the Bureau of Labor Statistics (BLS) will not release the latest jobs numbers for the second consecutive month because of the ongoing government shutdown.
S&P Global and the ISM will publish the latest US manufacturing and services PMI numbers. These numbers will come a week after the Fed cut interest rates for the second time and warned that another cut may not happen in December.
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