The S&P 500 Index suffered a harsh reversal on Thursday and Friday as investors reacted to the latest US non-farm payrolls (NFP) data and Broadcom (NASDAQ: AVGO) earnings. It retreated to $7,383, down from the year-to-date high of $7,618. This article looks at the key catalysts that will impact the index and the top ETFs like VOO, SPY, and IVV.
S&P 500 Index, VOO, SPY, and IVV ETFs to react to SpaceX IPO
The US stock market will be in the spotlight as Elon Musk’s SpaceX launches its highly anticipated Initial Public Offering (IPO) that happens on June 12.
This will be a notable IPO for a few reasons. For example, it will be the world’s biggest IPO as the company will raise $75 billion at a valuation of over $1.7 trillion. The IPO has already attracted more orders than the planned offering, meaning that its post IPO valuation may push it to $2 trillion.
It is also associated with Elon Musk, who created Tesla, a company valued at over $1 trillion. As such, it may go parabolic after the IPO. However, the risk is that the stock will retreat after the IPO as we have seen with other recent IPOs like Figma, Circle, and Medline.
Top technology companies to publish earnings
The other key catalyst for the S&P 500 Index and its top ETFs, like VOO, SPY, and IVV, will be some key technology earnings. As we experienced last week, a single company can have a major impact on the broader market. US stocks tumbled sharply after the Broadcom earnings.
While the company published strong numbers, its guidance was relatively weaker than expected. These numbers led to a sharp retreat in semiconductor companies like AMD, Intel, and Nvidia.
The main company to watch this week will be Oracle, one of the top players in the technology industry. Analysts believe that Oracle’s earnings will show that its revenue rose by 20% in the quarter to $19 billion. The expectation is that its full-year revenue will grow by 17% to $67 billion, followed by $88 billion next year.
The other top company to watch will be Adobe, a top software maker whose stock has retreated amid the ongoing SaaSApocalypse fears. Its results will provide more information about its business and the impact of its AI tools on its business. Some of the top companies that will publish their earnings this week are Lennar Corporation, RH, Core & Main, and Chewy.
US consumer inflation report
The other key catalyst to watch will be the US consumer inflation report on June 10. These are important numbers that will provide more information about the state of the economy.
Economists polled by Reuters expect the numbers to show that the headline CPI rose by 4.2% from 3.8% in the previous month. Core inflation, which excludes the volatile food and energy prices, is expected to come in at 2.9%.
A higher inflation report than expected will raise the possibility that the Federal Reserve will maintain a hawkish tone. Such a move would drag the stock market as bond yields jump.
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