US stocks have swung sharply in recent sessions as traders weigh growing unease over AI valuations against renewed pressure from the bond market, where Treasury yields have pushed to multi-decade highs. This article looks at the top catalysts for the Dow Jones and Nasdaq 100 indices this week.
Dow Jones and Nasdaq 100 to React to Jackson Hole Symposium
The stock market will react to the upcoming Jackson Hole Symposium, an annual gathering of top central bank officials. Kevin Warsh, the Federal Reserve Chair, will be the main official to watch when he talks on Friday.
Historically, Fed leaders like Jerome Powell, Janet Yellen, and Ben Bernanke have used the meeting to make major announcements and prepare investors for what to expect.
A hawkish tone from Warsh would likely weigh on the stock market, while any hint at rate cuts should be bullish. Market participants aren’t expecting much clarity either way, though, since Warsh has already signaled he won’t offer forward guidance.
US Personal Consumption Expenditures (PCE) Data
Markets will be watching Wednesday’s Personal Consumption Expenditures (PCE) report, the Fed’s preferred inflation gauge.
Unlike the Consumer Price Index (CPI), which tracks a fixed basket of out-of-pocket spending by urban consumers, PCE covers a broader range of spending, including costs paid on consumers’ behalf by employers and government programs.
Economists expect the upcoming report to show that the headline and core PCE numbers dropped a bit in July. The annual figures are expected to come in at 3.5% and 3.3%, respectively. If this is correct, it will mean that annual inflation remains much higher than the Federal Reserve’s target of 2.0%.
Top Corporate Earnings
The earnings season has largely ended, with over 90% of all companies in the S&P 500 Index having released their numbers. FactSet (NYSE:FDS) data shows that the earnings growth was strong, with the blended figure being above 50%.
This week will see several important companies release their numbers. Nvidia (NASDAQ:NVDA), the biggest company in the world, will be in the spotlight as it releases its numbers on Wednesday.
Marvell Technology (NASDAQ:MRVL), another top company in the semiconductor industry, will release its numbers on Thursday. Most notably, many software companies like Salesforce, Autodesk, Intuit, and CrowdStrike will publish their financial results this week.
Bond Market Jitters
The stock market will also react to the ongoing jitters in the bond market, where vigilantes are pushing back. They have now pushed the 30-Year Treasury Yield to the highest level in nearly 20 years, leading to an intervention by Scott Bessent.
This intervention has backfired, with the 30-Year Yield bouncing back closer to the year-to-date high. As such, with the economy slowing, and with the public debt hitting $40 trillion, there is a likelihood that yields will continue rising. This performance will likely have an impact in the stock market.
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