The S&P 500 and Dow Jones have climbed to record highs this year, driven by ongoing risk-on sentiment among investors and strong corporate earnings. They are up 23% and 20%, respectively, from their lowest levels of the year. This article examines the top three stock market news to watch this week
S&P 500 and Dow Jones to React to Retail Earnings
The main stock market news to watch this week will be top earnings by the biggest retailers. Home Depot(NYSE:HD) will be the first one to release its results on Tuesday before the market opens.
TJX Companies(NYSE:TJX), Lowe’s(NYSE:LOW), and Target(NYSE:TGT) are scheduled to release their earnings on Wednesday, while Walmart(NASDAQ:WMT) will report its results on Thursday. Williams-Sonoma(NYSE:WSM) and BJ’s Wholesale Club (NYSE:BJ) will release on Friday
These results will provide more color on the state of American retailers and consumers as inflation remains at an elevated level. The most recent numbers showed that US inflation has remained above the 2% target for years. A report released on Friday showed that US retail saleshad its worst month in years in July.
In addition to these retailers, more large companies like AeroVironment, Analog Devices, Deere, and Estee Lauder will report this week.
The ongoing earnings season has been highly successful, with the blended earnings growth of all companies in the S&P 500 Index being 50.4%, its highest level since 2021
Federal Reserve Minutes
The S&P 500 and Dow Jones indices will also react to the upcoming Federal Reserve minutes on Wednesday. These minutes will provide more information on what officials deliberated on in the last meeting.
In that meeting, officials decided to leave interest rates unchanged between 3.50% and 3.75%, with three officials voting to hike.
Since then, the US has released some important data, leading to lower odds that the bank will hike rates later this year. The labor report showed that the economy lost 23k jobs in July, while inflation dropped slightly. Retail sales and consumer confidence have also dropped.
US to Announce Severe Iran Sanctions
The geopolitical crisis in the Middle East will also have an impact on the stock market. Scott Bessent, the Treasury Secretary, has announced plans to intensify Iran’s isolation
However, it is unclear what else the administration will do since it has restarted its sanctions and announced a naval blockade. The risk, however, is that Iran may opt to restart kinetic actions since the US weapons are running out and morale inside USS Lincoln has dropped
A return to war will likely lead to higher crude oil prices, fuel inflation concerns, and affect the stock market
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