The S&P 500 Index continued its strong rally and ended the month at a fresh all-time high. It has officially entered the bull market after soaring by over 20% from its lowest point in March this year. Here are the top catalysts that will drive the index and its top ETFs, like Vanguard's (NYSE:VOO) and State Street's (NYSE:SPY).

S&P 500 Index to React to Key Corporate Earnings

One reason why the S&P 500 Index has jumped to a record high this year is the booming corporate earnings. A report by FactSet (NYSE:FDS) shows that the earnings growth in the first quarter was a whopping 28%, the fastest growth rate since the fourth quarter of 2021. Analysts were expecting the earnings growth to be 13% before the earnings season started.

Most companies published strong results, with NVIDIA being one of the best performers. Its revenue jumped by 85% in the first quarter, with the management hinting that it will make $91 billion this quarter.

Some notable S&P 500 constituents will publish their results this week. The most notable one will be Broadcom (NASDAQ:AVGO), the $2.1 trillion tech behemoth. The other top companies to watch will be CrowdStrike (NASDAQ:CRWD), Palo Alto Networks (NASDAQ:PANW), Medtronic (NYSE:MDT), and Veeva Systems (NYSE:VEEV).

US-Iran Ceasefire Deal

VOO and SPY ETFs will also react to any new developments in the ongoing US-Iran war. According to Axios, President Donald Trump reviewed Iran's proposals and requested some edits.

Polymarket traders now expect that the two sides will reach a deal to extend the ceasefire for 60 days as they deliberate on nuclera issues. A deal will be bullish for the stock market because it will lead to lower crude oil prices. 

Indeed, data shows that Brent and the West Texas Intermediate have dropped by double digits from the year-to-date high. As a result, US bond yields have pulled back, with the ten-year and two-year yields falling to 4.43% and 4%, respectively. 

US Non-Farm Payrolls Data

The US stock market will react mildly to some key macro data this week, including the manufacturing and services PMI numbers. These numbers will provide more color on the state of the US manufacturing and services sectors amid the war.

The most important report will come out on Friday when the Bureau of Labor Statistics (BLS) will publish the official non-farm payrolls (NFP) data. The average estimate among analysts is that the unemployment rate remained at 4.0% in May as the economy added over 93k jobs.

In theory, a strong jobs report should be bearish for the stock market as it will make the case for interest rate hikes. Still, Polymarket traders are predicting that rates will remain intact for the remainder of the year.

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