Top catalysts for the Dow Jones Index this week

The Dow Jones Index rebounded last week, reaching its highest point since May 4 as the US and Iran reached a two-week ceasefire.

It rose to $48,250, up by 6.45% from its lowest level this month. This report explores some of the top catalysts for the DJI Index this week.

Dow Jones Index on edge as US-Iran talks end without a deal

The Dow Jones Index will be on edge this week as market participants wait for the next actions by President Donald Trump and Benjamin Netanyahu now that the first round of talks between the US and Iran ended without a concrete agreement.

In a statement, Vice President JD Vance said that the meeting ended without a deal as the Iranians had refused to accept US terms.

Iran, on the other hand, maintained that it was not in a hurry to make a bad deal and maintained that it will continue managing the Strait of Hormuz. Tasnim said:

“The Americans intended to achieve concessions in the negotiation room that they could not obtain during the war.”

The meeting is a big disappointment to Trump who wanted a quick resolution as his approval rating drops and his closest allies flee.

For example, Marjorie Taylor Green and Alex Jones have called for his removal from office, while top allies like Tucker Carlson and Joe Rogan have criticized the war.

Therefore, an escalation will likely lead to higher crude oil prices and a stock market reversal as odds of a Federal Reserve interest rate cut fade.

A report released on Friday showed that US consumer inflation jumped to 3.3% in March as it moved further away from the Federal Reserve's target of 2.0%.

Corporate earnings season 

The other main catalyst for the Dow Jones Index this week will be the first-quarter earnings season.

All the biggest American banks, like JPMorgan, Goldman Sachs, Bank of America, Citigroup, and Morgan Stanley, will publish their numbers this week.

In addition to this, other top non-banks like Fastenal, Johnson & Johnson, BlackRock, Progressive, Netflix, PepsiCo, and Abbot will also release their numbers this week.

A report by FactSet shows that the estimated YoY growth rate for the S&P 500 Index is 12.6%.

If this is the final number, it will be that sixth consecutive quarter of double-digit earnings growth. 

Most notably, historical data shows that the real earnings growth report is usually higher than estimates, with FactSet estimating that the real figure will be 19%, the highest point since 2021. The report added:

“Over the past ten years, actual earnings reported by S&P 500 companies have exceeded estimated earnings by 7.1% on average.”

Minor US macroeconomic data 

The Dow Jones Index has rebounded after the recent US macroeconomic data.

The most notable one was the labor market report, which showed that the economy created 178k jobs as the unemployment rate fell to 4.3%.

It also reacted mildly to last Friday’s consumer inflation report, which showed that inflation surged from 2.4% to 3.3% in March. The core inflation report rose from 2.5% to 2.7%.

Therefore, these numbers mean that the Federal Reserve may maintain a hawkish tone this year to counter the rising inflation.

There will be some key macro data this week, including the US producer price index (PPI), and import and export prices.

Economists expect the upcoming report to show that the headline PPI inflation report rose to 4.1% in March from the previous 3.4%.

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