The Dow Jones, S&P 500, and Nasdaq 100 indices and their ETFs moved sideways last week as investors focused on monetary policy and Nvidia earnings. The S&P 500 Index pulled back to $6,460 from the year-to-date high of $6,500.

Similarly, the Dow Jones Index was trading at $45,545, while the Nasdaq 100 fell from $23,965 to a low of $23,415. This article looks at the top catalysts for the indices and the ETFs like VOO, DIA, and QQQ.

US nonfarm payrolls data

The most important catalyst for the Dow Jones, S&P 500, and Nasdaq 100 indices is the upcoming US nonfarm payrolls (NFP) data scheduled on Friday.

This is an important report that will provide more color on the health of the American economy and will help to determine what the Federal Reserve will do in the next meeting. 

In a recent statement at the Jackson Hole Symposium, Jerome Powell, the Fed Chair, hinted that the bank will cut interest rates in September, citing the deteriorating labor market. 

The last report showed that the economy created just 73,000 jobs in July, much lower than what analysts were expecting. This figure will likely be downgraded further based on what happened recently. Traders will want to see the revision. 

The indices and their ETFs will also react to the unemployment rate. Data shows that analyts anticipate that the jobless rate rose to 4.3% in August as the economy created 78k jobs.

A weak jobs report will confirm that the Federal Reserve will cut interest rates in September, which most analysts already expect. The stock market tends to do well when the Fed is cutting interest rates.

Donld Trump tariffs in limbo

The other major catalyst for the Dow Jones, S&P 500, and the Nasdaq 100 is the latest appeal decision on Donald Trump’s tariffs. In a ruling, a bench found that most of Trump’s tariffs are illegal, a move that the stock market would welcome. 

However, the court allowed the tariffs to remain, and the Trump administration appealed. Most analysts believe that the case will go all the way to the Supreme Court, which may side with the administration. 

Corporate earnings

The other minor catalysts for the indices and their ETFs will be corporate earnings. Just a handful of companies will publish their earnings, including names like Carnival, McCormick, Nike, Constellation Brands, and Lamb Weston.

The recent earnings season was highly successful. A report by FactSet shows that 98% of all companies in the S&P 500 Index have published their earnings. Of these 81% of them published an earnings beat, while the earnings growth was 11.9%. This was the third straight quarter of double-digit growth.

Top economic data

Another minor catalyst for the US stock market will be macro data from the United States and other countries. The top data to watch will be the final manufacturing and services PMI, JOLTs job vacancies, and ADP private sector data. 

While important, their impact on the stock market will be muted since all eyes will be on the nonfarm payroll (NFP) data.

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Marvell stock price plummeted by over 18% on Friday after the semiconductor giant published its earnings report. MRVL plunged to a low of $62.87, its lowest level since June 4, and 26% from its highest point this month. So, is it safe to buy the MRVL stock dip or wait for it to plunge further?

Marvell stock plunged after earnings

Marvell Technology’s stock price plummeted even after the company published strong financial results. Its revenue surged by 58% in the second quarter to a record $2 billion.

This revenue growth was driven primarily by the tailwinds in the artificial intelligence (AI) industry and the recovery of it enterprise networking and carrier infrastructure businesses.

AI data center revenue jumped by 70% to $1.4 billion, a trend that may continue as it continues to reach large deals. Its enterprise and carrier revenye rose by 43%, a strong improvement considering that it has been in a slowdown in the past few quarters. 

Marvell’s revenue growth was accompanied by its margin expansion. Gross margin rose to 50.4% from the previous 50.3%, while the operating margin rose to 14.5%. This helped to push its net profit up by 120% to $585 million. The CEO said:

“Marvell’s growth is being fueled by strong AI demand for our custom silicon and electro-optics products, as well as a significant increase in the pace of recovery in our enterprise networking and carrier infrastructure end markets.”

The main reason why the Marvell stock price crashed is that the managment’s forward guidance was weaker than expected. Its guidance was that its revenue for the third quarter will be $2.06 billion, a 36% increase from the same period last year. 

While a 36% annual growth is a good one, it was lower than what analysts were expecting. Historically, Marvell tends to be highly conservative, meaning that its real numbers will likely be better than estimates. 

Marvell stock price also plunged after Nvidia, a top player in the chip industry, warned that its business was slowing. Also, there is a fear that some Chinese companies will disrupt the semiconductor industry. 

MRVL stock price technical analysis

The daily timeframe chart shows that the MRVL stock price has plunged from its highest point in January, when its market cap overtook that of Intel. 

It plunged from a high of $127.30 in January to a low of $47.50 in April. Most recently, the stock formed an ascending channel, which was part of its bearish flag pattern. It has moved below the lower side of this pattern.

Marvell stock price has moved below the 50-day and 100-day Exponential Moving Averages (EMA). It has moved to the strong, pivot, reverse point of the Murrey Math Lines tool. 

Therefore, the most likely scenario is where the Marvell stock price continues plunging, potentially to the year-to-date low of $47.50. It will then bounce back later this year.

Read more: JPM says ignore earnings noise and buy Marvell stock like there’s no tomorrow

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The renminbi is performing well as the Chinese economy continues to thrive. The USD/CNY exchange rate plunged to a low of 7.1300, its lowest level since November last year and 3% below its highest level this year.

Chinese yuan gains momentum 

The USD/CNY pair continued falling last week, helped by the Chinese economy, the roaring stock market, and the falling US dollar.

Data released on Sunday showed that the Chinese manufacturing and services sectors continued improving in August.

The manufacturing PMI increased from 49.3 in July to 49.4 in August, higher than the median estimate of 49.2. While a PMI figure of below 50 is a sign of contraction, the fact that it is moving upwards is a good indicator.

The report showed that the non-manufacturing PMI rose from 50.1 in July to 50.3 in August, helping to push the general PMI up from 50.2 to 50.5.

Recent data has shown that the Chinese economy was doing well in spite of the ongoing trade war with the United States.

A report by the statistics agency showed that the Chinese economy grew by 5.2% in the second quarter, down from 5.4% in the first one. This growth was driven by the rising exports as American companies rushed to buy products before Trump’s tariffs.

The first and second quarter data means that the Chinese economy will likely grow at a faster pace than the planned 5%. 

Meanwhile, the Chinese yuan has also done well as the stock market has surged in the past few months. The Shanghai Composite has soared to its highest level in years, thanks to increased participation by retail investors.

US Dollar Index weakness 

The USD/CNY exchange rate has plunged because of the ongoing US dollar weakness. Data shows that the DXY Index has plunged from the year-to-date high of $110 to below $98 as the economy has continued to struggle.

Recent data showed that the US economy grew by 3.3% in the second quarter. While this was an improvement, it came after the economy contracted in Q1 as the Chinese one grew.

The US labor market has deteriorated, with the unemployment rate rising to 4.2% in July. It created just 73,000 jobs in July, and analysts expect it to have added 78k in August.

Therefore, analysts expect the Federal Reserve to begin cutting interest rates at its upcoming meeting in September.

USD/CNY technical analysis 

The daily timeframe chart shows that the USD/CNY exchange rate has been in a strong downward trend in the past few months. It has crashed from a high of 7.3498 in April to the current 7.1300, its lowest level since November last year.

It recently plunged below the important support level at 7.1480, its lowest level on July 24. Moving below that level confirmed the bearish breakout.

The pair remains below the 50-day and 200-day moving averages, which formed a death cross in June.

Therefore, the pair will likely continue falling as sellers target the key support level at 7.010. Such a move will signal a 1.68% drop below the current level.

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The Turkish lira continued its strong plunge this month, reaching its all-time low. The USD/TRY exchange rate rose to 41.15, up by over 41% from its lowest level in January this year.

Improving the Turkish economy 

The USD/TRY exchange rate has surged this year, even as macro data showed that the country’s economy was doing relatively well.

Inflation, which has been a major issue in the past few months, has made some improvement in the past few months. A recent report by the statistics agency showed the headline Consumer Price Index (CPI) dropped to 33.52% in July from 35% in June.

While the 33.5% inflation rate is huge, it is notable for two main factors. First, it has been in a downward trajectory for 14 consecutive months after it peaked at over 70% in 2023.

Second, the inflation plunge happened after the central bank slashed interest rates. It moved the benchmark interest rate to 43% in July, a 300 basis points cut. This cut means that the bank has erased the 350 basis point increase in April when political factors triggered a lira plunge.

The USD/TRY will react to the upcoming Turkish inflation data. Economists expect the report to show that the headline Consumer Price Index fell from 33.5% in July to 32.6% in August this year.

The monthly inflation figure is expected to come in at 1.79% from 2.06%, a sign that prices are moving in the right direction. Similarly, the Producer Price Index (PPI) is expected to come in at 23.5% from the previous 24.19%.

The other major catalyst for the USD/TRY will be the upcoming Turkish GDP data on Monday. Economists expect the upcoming report to show that the Turkish economy expanded by 4% in Q2, up from 2% in the previous quarter.

In a recent statement, the finance minister expects that the economy will grow by 4% this year, higher than the median estimate of 2.8% among analysts. Top credit rating agencies have upgraded their credit rating.

The USD/TRY exchange rate has jumped, even as the US dollar index continues to plunge, moving from a high of $110 in January to $98.

The pair is often seen as a good carry trade opportunity because of the interest rate differential between the United States and Turkey. With the US interest rates at 4.50% and Turkey’s being above 30%, investors are borrowing the greenback to invest in Turkey.

The other important catalysts for the USD/TRY exchange rate will be the upcoming US non-farm payrolls data, which is scheduled to be released on Thursday. This report will provide more information about the health of the labor market and influence the next interest rate decision.

USD/TRY technical analysis 

The daily timeframe chart shows that the USD/TRY exchange rate has been in a strong uptrend this year and is now hovering at its all-time high.

It has constantly remained above all moving averages, while the Relative Strength Index is at the overbought level.

Therefore, the pair will likely continue rising in the coming weeks as investors predict that the CBRT will continue cutting interest rates in the coming months. If this happens, the pair will keep rising and reach 42.

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The USD/JPY exchange rate remained in a consolidation phase last week as traders focused on the upcoming actions by the Bank of Japan (BoJ) and the Federal Reserve. It was trading at 147, where it has remained in the past few days. It has dropped by over 7.5% from the year-to-date high.

US nonfarm payrolls data

The USD/JPY exchange rate was unchanged as traders wait for the upcoming US nonfarm payrolls (NFP) data. Economists expect the data to show that the economy expanded by just 78,000 in August, a slight improvement from the 73,000 it added in the previous month. 

Based on the recent trends, it is likely that the Bureau of Labor Statistics (BLS) will downgrade the estimate of the July jobs report. In its last report, it downgraded the May and June jobs reports to show that the economy created an average of 35,000 jobs in May and June.

The upcoming jobs report is important because it is what the Federal Reserve is focusing on when making it interest rates. If the jobs numbers come short of expectations, they will boost the odds that the Fed will cut interest rates by 0.25%.

On the other hand, recent data sent mixed signals on the Japanese economy. In Tokyo, the headline consumer price index (CPI) rose 2.6% in July, while the core CPI jumped 3.0%.

Tokyo’s inflation eased mostly because of the government’s subsidies, suggesting that things are not going on well. The tight labor market means that inflation will remain at an elevated level for a while. 

At the same time, the country’s industrial production is weakening, complicating the BoJ’s outlook. In a note, analysts at ING wrote that:

“We continue to believe that the Bank of Japan will deliver a 25 hike in October thanks to reduced uncertainty over US tariffs and firm inflation. But the BoJ’s concern about weak growth may have increased after today’s weak activity data.”

USD/JPY technical analysis

The daily chart shows that the USD/JPY exchange rate has plunged in the past few days. It has slumped from a high of 150, its highest point in July to the current 147. 

The pair has formed a bearish flag chart pattern, which is comprised of a vertical line and an ascending channel. It has formed an inverse cup-and-handle pattern. 

Therefore, the pair will likely continue falling, with the next point to watch being at 145.

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