Dow Jones and S&P 500 Outlook: Stock Market News To Watch This Week

Wall Street ended last week sharply lower as investors digested the outcome of the midterm elections. The S&P 500 is now about 6% below its peak for the year and sits at its lowest level since July, while the Dow Jones has slipped 6.3%. Here are the top stock market stories likely to move both indices this week.

US Stocks to React to Key Earnings

Most companies in the S&P 500 Index have already published their third-quarter earnings. According to FactSet (NYSE:FDS), 84% of all companies in the index have already released their numbers, with the blended earnings growth being 31.4%.

The most important companies, including Wall Street banks and the Magnificent Seven, have already released their numbers. Large banks were affected by a slowdown in dealmaking, while investors focused on capital expenditures among hyperscalers. 

A few large companies will release their earnings reports this week. Neoclouds like CoreWeave and Nebius will publish their results as jitters surrounding the artificial intelligence (AI) industry remain. 

Cisco Systems and Applied Materials will publish their numbers on Thursday. The other top names to watch will be Nu Holdings, Cerebras Systems, Vylor, KKR, and Occidental. 

US Consumer Inflation Report

The S&P 500 and Dow Jones also retreated after the US published the October nonfarm payrolls report. The report showed that the economy created 165k jobs in October and revised the September data from 29,000 to 60,000. Also, the unemployment rate fell to 4.1%, while wage growth was strong.

Focus this week will be on the US consumer inflation report, which will come out on Tuesday. Economists expect the data to show that the headline and core inflation softened on a monthly basis, but remained stubbornly above the 2% target on an annual basis. 

The report will help investors predict the next Federal Reserve’s action. Most economists already expect the Fed to hike interest rates in December, with the CME FedWatch tool having a probability of 78.7%.

Trump Action on Iran

The US stock market will also react to President Donald Trump’s decision on Iran since the midterm elections have ended. Trump has no good options on the Iran war he started in February.

He may decide to restart the war, aiming for a short and limited strikes on the country. If he does that, oil prices will rebound and put pressure on the stock market and his approval rating. 

On the other hand, if he decides to focus on negotiations, Iran will seek to leverage his weakness to get a better deal than the Memorandum of Understanding (MoU). 

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