The SPDR S&P 500 ETF (SPY) has bounced back in the past few weeks, rising from the monthly low of $483 to a high of $550. Similarly, the SPDR Dow Jones Industrial Average (DIA) has risen to $401 from a low of $366, while the tech-heavy Invesco QQQ Trust (QQQ) has risen to $472 from a low of $400.
This article looks at the top three catalysts that will impact these ETFs later this week.
Corporate earnings will impact SPY, DIA, and QQQ ETFs
The main catalyst for the three blue-chip ETFs will be corporate earnings by some of the biggest companies in the world.
Apple, the largest company in the US, and a constituent of the S&P 500, Dow Jones, and Nasdaq 100, will be one of these firms. It will publish its financial results on Thursday this week.
These numbers come as concerns about it remain. Its iPhone sales are not growing as they did in the past, while its innovation in artificial intelligence has lagged behind its peers. A good example of this is Siri, which cannot handle basic questions.
Amazon will also publish its results on Thursday. As the biggest e-commerce player, these results will shed light on the impact of tariffs on its business.
Microsoft, Meta Platforms, and Berkshire Hathaway will be the other top companies that will release their results this week. These firms, which are part of the Magnificent 7, will provide more details about the growth of the AI industry.
In line with this, the May 4 Berkshire Hathaway meeting will be important for the stock market,
The other top firms to watch will be Eli Lilly, Chevron, Qualcomm, Waste Management, Visa, Coca-Cola, Caterpillar, and Illinois Tool Works.
The earnings season so far has been good although, as expected, companies have warned about tariffs. FactSet data shows that the earnings growth of companies that have published their results so far stood at 10.1%. If this is the final figure, it will mark the second straight quarters of double digit growth rate.
US consumer confidence, GDP, and NFP data
The other top catalyst for the SPY, QQQ, and DIA ETFs is top macroeconomic data from the United States.
First, the Conference Board will publish the latest consumer confidence data on Tuesday. Economists expect the data to reveal that confidence dropped in April because of Trump’s tariffs. A significant drop in confidence is usually a sign that the economy is softening and even moving into a recession.
Second, the Bureau of Economic Analysis (BEA) will publish the latest GDP data on Thursday. Analysts expect the data to show that the economy softened in the last quarter as tariff jitters rose.
The final key data to watch will be the nonfarm farm payrolls on Friday. These numbers will provide more details on the economy.
However, the general view of all these numbers, including the earnings, is that they are transitory as they don’t include Trump’s Liberation Day tariffs.
Trade news will impact S&P 500, Dow Jones, and Nasdaq 100
Further, trade news will have an impact on the SPY, DIA, and QQQ ETFs. The general view among analysts is that the US and China may start negotiating soon. China has already started to offer exemptions on some goods from the US that it lacks alternatives.
The WSJ has reported that the US wants to slash China tariffs as its openings salvo for trade talks. If this happens, there is a likelihood that the three indices will continue rising this week.
A trade deal will help to reduce the rising recession odds in the United States and boost asset prices.
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