The Dow Jones and the S&P 500 indices dropped last week as concerns about the American economy rose following Moody’s decision to downgrade US credit rating. They also dropped after the House passed the Big Beautiful Bill which will grow the deficit. This article explores the top catalysts that will move the two indices this week.
NVIDIA earnings
The most important catalyst for the S&P 500 and Dow Jones this week will be the upcoming NVIDIA earnings on Wednesday.
These results are important because of NVIDIA’s scale as it is the third-biggest company in the world. It has also become the poster child for the growing artificial intelligence (AI) industry.
Therefore, signs that the firm is still growing fast will be a sign that the AI bubble has not burst. Analysts anticipate that its revenue will rise by 65% to $43 billion. They also expect that its forward guidance for the second quarter and full year will be $45.68 billion and $200 billion.
Odds are that NVIDIA’s revenues will be higher than expected, as it has always been. As such, the quarterly revenue may come in at $45 billion.
The average estimate is that NVIDIA’s earnings per share will be 73 cents, up from 61 cents. It has beaten its estimates in all quarters since 2022.
The other top companies that may move the Dow Jones and S&P 500 indices are Costco, Dell, Marvell Technologies, Costco, and Synopsys.
Federal Reserve minutes
The other top catalyst for the two indices will come out on Wednesday when the Federal Reserve publishes minutes of the last meeting.
These minutes will provide more details about what officials deliberated in the last meeting when they decided to leave interest rates unchanged.
Most Fed officials have noted that they will not be in a hurry to cut interest rates since they expect Trump’s tariffs will boost inflation in the coming months.
Therefore, while the FOMC minutes often move US stocks, there is a likelihood that they will not do so this time. That’s because most analysts expect that the bank will cut interest rates for the first time in September.
Dow Jones and S&P 500 to react to Trump trade talk
US stocks plunged on Friday after Donald Trump threatened a 50% tariff on European goods. Such tariffs would likely have a major impact on US stocks since many companies do a lot of business in Europe.
For example, Boeing’s biggest customer is Ryanair, a European company that has threatened to cancel its orders if there are large tariffs. Tech companies like Google and Meta also do a lot of business in Europe.
On the positive side, analysts believe that Trump is using the tariff threat as a negotiating tactic.
Big Beautiful Bill
The other important catalyst for the S&P 500 and Dow Jones is in Washington, where the House passed the Big, Beautiful Bill last week, a few days after Moody’s slashed the country’s credit rating.
Focus will now turn to the Senate, where Republicans will continue deliberating the bill that the House passed. Passing the bill as it is could lead to more stocks retreat because of the soaring US debt.
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