S&P 500, VOO, and SPY Outlook: What Investors Need to Watch This Week

The S&P 500 Index and its ETFs, such as VOO, SPY, and IVV, have pulled back over the past two weeks as jitters about artificial intelligence have intensified. The index ended the week at 7,623, down modestly from its year-to-date high of 7,845. This article looks at some of the top stock market news to watch this week.

S&P 500 Index to React to Earnings Season

S&P 500 and other top US indices will react to the ongoing earnings season, which started earlier this month. Top companies like Meta Platforms (NASDAQ:META), Tesla (NASDAQ:TSLA), and SpaceX (NASDAQ:SPCX) have already published their earnings. Per FactSet, the earnings season so far has been strong, with the average growth being 29.5%. 

Earnings season will intensify this week, with most S&P 500 companies set to release their results. The most closely watched reports will come from Magnificent Seven companies such as Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), and Microsoft (NASDAQ:MSFT). Because of their size and their central role in the artificial intelligence industry, these results have the power to move the entire market.

Federal Reserve Interest Rate Decision

The other important driver for the S&P 500 Index, VOO, IVV, and SPY will be the Federal Reserve, which will deliver its October decision on Wednesday. Historically, Fed statements tend to move the broader market. 

Economists and Polymarket traders expect the Fed to hold interest rates steady in the 3.75% to 4% range. The odds of a hold rose after the US published a weak nonfarm payrolls report, which showed the economy added just 29,000 jobs. The unemployment rate rose to 4.2% from 4.1%, while wage growth slowed.

US stocks will mostly react to the dot plot, which will provide hints on what to expect in the next meetings. 

Artificial Intelligence Jitters

The S&P 500 Index has pulled back recently because of the ongoing jitters surrounding the artificial intelligence industry. These jitters rose recently as bond yields of several companies like CoreWeave (NASDAQ:CRWV) and Oracle (NYSE:ORCL) surged. 

Some popular analysts, including Michael Burry, Ken Griffin, and Ray Dalio have sounded the alarm about the AI industry. The AI Stock Bubble Index has also jumped to the extreme level of 74. 

Therefore, the market will react to any new developments in the AI industry. Some of that information may come from the upcoming earnings reports by technology companies.

In addition, the stock market will react to the rising crude oil prices and the potential escalation between the US and Iran.

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