The S&P 500, Dow Jones, and Nasdaq 100 indices have soared to their all-time highs this year, driven by the artificial intelligence supercycle and the strong earnings. They have soared by 9%, 6.50%, and 20%, respectively, this year.

The rally stalled last week after the Federal Reserve delivered a hawkish decision, with nine officials pointing to higher interest rates this year. This article highlights the top three catalysts that will drive US stocks this week.

Micron Quarterly Earnings

Recent earnings show that some individual stocks have the ability to affect the broader stock market. A good example of this is when technology stocks plunged after Broadcom (NASDAQ:AVGO) released its earnings. 

The top company to watch this week will be Micron, a top player in the High Bandwidth Memory (HBM) industry that releases its results on Wednesday. 

Its results are important because it has become one of the best-performing companies after soaring by 845% in the last 12 months. It has also entered the exclusive $1 trillion club.

Most importantly, its business is in an industry that is leading in terms of growth. Its peers like Sandisk, Western Digital, and Seagate are among the top gainers in the stock market this year. As a result, strong results will push the S&P 500, Nasdaq 100, and Dow Jones much higher, and vice versa.

In addition to Micron, other companies like FedEx (NYSE:FDX), Paychex, and Darden Restaurants will publish their numbers this week.

US and Iran Talks in Switzerland 

The US stock market reacted positively to reports that the US and Iran reached an agreement to reopen the Strait of Hormuz last week.

This deal started a 60-day countdown in which the two countries should reach a nuclear agreement. These talks started today in Switzerland, with JD Vance leading the US side.

The main risk is that the US-Iran war may restart because of the crisis in Lebanon, where Israel and Hezbollah and Israel are still shooting at each other. On Saturday, Iran announced that it had closed the Strait of Hormuz, in a bid to pressure the US to contain Israel. Therefore, any developments will likely have a major impact on the stock market.

Key US Macro Data Will Impact US Stocks

Other potential catalysts for the S&P 500, Dow Jones, and Nasdaq 100 indices will be key macro data from the US. S&P Global will publish the flash manufacturing and services PMIs on Tuesday, while the Bureau of Economic Analysis will release the final estimate of GDP data on Thursday.

The most important data will be the US Personal Consumption Expenditure (PCE) inflation report on Thursday. This is a crucial number as it is the Federal Reserve’s preferred inflation gauge. Economists expect the data to show that the headline and core PCE numbers rose in May. 

These numbers come as US bond yields continue rising after the hawkish Federal Reserve decision. Nine FOMC members hinted that they would support rate hikes now that inflation has remained above 2% for over five years.

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