The S&P 500 Index has jumped in the past few weeks and pared back some of the losses it made earlier this year when Donald Trump unveiled his tariffs. After initially falling to a low of $4,840 in April, it has rebounded by 17% to the current $5,660, its highest level since April 2.
Top S&P 500 Index catalysts
The S&P 500 Index has had numerous catalysts in the past few weeks. The most important one has been the rising hope that the US will reach trade deal with other countries, especially China.
It has already reached a deal with the United Kingdom, and Donald Trump hailed the first day of talks with China in Switzerland. A potential deal will lead to lower tariffs and a commitment for China to buy more US goods, especially in the energy and agricultural sectors.
Trump also hopes that China will lower its non-tariff barriers, including intellectual property (IP) theft. Still, it is clear that the deal between the two countries will take more rounds of talks to achieve. Scott Bessent, the Treasury Secretary, has hinted that they will take at least three years.
The other catalyst for the S&P 500 Index is the Federal Reserve, which left interest rates unchanged in its meeting last week. It left rates intact at 4.50% last week and hinted that it will embrace a wait-and-see attitude when making the next decision to cut.
A trade deal between the US and other countries would help the Federal Reserve cut rates earlier as it would lead to lower inflation.
Further, the index has reacted mildly to the ongoing earnings season. Data compiled by FactSet shows that 90% of all companies in the S&P 500 Index have reported earnings. Their blended earnings growth was 13.4%, the second straight quarter of double-digit earnings growth.
The earnings season has been relatively muted because analysts believe that these earnings were transitory since the reciprocal tariffs were not implemented in the first quarter.
As the earnings season winds down, some of the top S&P 500 Index stocks to watch will be Walmart, Applied Materials, and Cisco Systems.
Walmart (WMT)
The Walmart stock price has done well in the past few weeks as it jumped from $80 in April to $97 today. This recovery mirrored the performance of other companies in the S&P 500 Index.
Analysts expect Walmart’s numbers to show that its revenue rose by 2.85% in the last quarter to $164.5 billion. Their hope is that the annual revenue this year will be about $702 billion, up by 4.10% from a year earlier. The average Walmart stock price forecast is $107, up from the current $96.
Read more: Is it too late to invest in Walmart stock as it hits a record high? here’s what experts are saying
Applied Materials (AMAT)
Applied Materials is another top company to watch as it releases its financial results on Thursday. These numbers come as the AMAT stock price is attempting to rebound after bottoming at $123.95.
Applied Materials, a top semiconductor company, is expected to publish revenues of $7.12 billion, a 7.12% increase from the same period last year. The annual revenues are expected to come in at $28.7 billion, a 5.8% from a year earlier. Analysts expect the AMAT stock price to jump to $201 from the current $155.
Read more: Applied Materials stock: Is AMAT a bargain ahead of earnings?
Cisco Systems (CSCO)
Cisco Systems stock price has jumped from a low of $52.15 in April to $60 today, and its earnings on Tuesday will have an impact on it.
The company’s business has benefited from the AI macro theme since it is one of the biggest providers of networking solutions. Analysts expect the results to show that its business did well in the last quarter as its revenue rose by 10% to $14 billion. Analysts have a Cisco stock price target of $67, up from the current $59.
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