The Dow Jones and Nasdaq 100 indices pulled back last week amid growing concerns about the semiconductor industry and the Federal Reserve. The two indices have retreated by 1.35% and 6%, respectively, from their year-to-date highs. This article explores the key catalysts that could drive the US stock market this week.

Dow Jones, Nasdaq 100 Indices to React to US Consumer Inflation Report

The US stock market retreated on Friday after the US published a strong jobs report. Per the Bureau of Labor Statistics (BLS), the economy created 172,000 jobs in May as the unemployment rate remained at 4.3%. 

Another report by ADP revealed that the private sector added 122k jobs last month, also higher than the expected 85k. Therefore, the next key macro data to watch will come from the BLS, which releases the latest US inflation numbers on Wednesday. 

Economists expect the numbers to show that the headline CPI rose by 4.2% in May as it moved further away from the Federal Reserve's target of 2.0%. A stronger figure than that will push the bank to hike interest rates in the coming meetings.

US and Iran Far From a Deal

The other key catalyst for the Dow Jones and the Nasdaq 100 indices is the US-Iran conflict. The two countries remain further apart on key issues, with attacks rising. Iran has launched drones and missile attacks against key US allies in the past few days in response to US ceasefire violations. 

The most recent news is that the US is considering using the frozen Iranian assets to repair infrastructure in key countries like Kuwait and Bahrain. Such a move will likely make a deal almost impossible, which will boost energy prices and inflation in the near term. It would also derail the stock market rally.

Top Technology Earnings

The stock market will also react to the upcoming earnings by some of the top US technology companies. Oracle (NASDAQ:ORC) will release its numbers on Wednesday, while Adobe (NASDAQ:ADBE) will publish a day afterwards.

These companies are important for two main reasons. Oracle has inked some major AI partnerships, including with OpenAI. Traders will focus on its Remaining Performance Obligations (RPO), which jumped to $553 billion. 

Adobe, on the other hand, is a top player in the software industry, where it operates one of the biggest SaaS platforms. The industry has come under pressure as investors predict that AI tools will disrupt its operations.

SpaceX Highly Subscribed IPO

The stock market will also focus on the upcoming SpaceX IPO, which will be the biggest ever. Data shows that the company's IPO is highly subscribed, with signs showing that it will raise $150 billion, double the $75 billion it planned for. 

Most analysts believe that the company's valuation will top $2 trillion shortly after the IPO. Still, history shows that most newly listed companies surge after the IPO and then retreat after that. This includes companies like Circle, Figma, and Medline.

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