Top catalysts for the S&P 500 Index: Iran war, NFP data, private credit

The S&P 500 Index remained in a tight range on Friday as market participants reacted to the latest US producer inflation report and a series of corporate earnings. It was trading at $6,878, a few points below the all-time high of $7,020. This article explores some of the top catalysts to watch this week.

S&P 500 Index to react to Iran crisis 

The S&P 500 Index will react to the ongoing crisis in the Middle East, where the US and Israel launched major attacks in Iran. These attacks killed Supreme Leader Ayatollah Ali Khamenei, leading to more risks in the region.

Iran responded by launching major attacks on US bases in the region and shutting the Strait of Hormuz, which will lead to higher crude oil prices when the markets open on Monday.

The S&P 500 Index’s price action will depend on the war’s trajectory. Signs that it is expanding will be highly bearish for the stock market, while signs that it will be a short war will be bullish for the index.

Top corporate earnings 

The S&P 500 Index will react to the upcoming corporate earnings, which will provide more information on the performance of top companies in the retail and technology industries.

The most notable earnings will come from Costco, one of the biggest players in the retail industry. CostCo, which runs the biggest wholesale company in the world, will publish the latest results on Thursday. Its results often provide more color on the state of American consumers.

The other notable company that will release its earnings this week is Broadcom, a top player in the semiconductor industry. Its results will come a week after Nvidia released its numbers, which showed that the AI industry was doing well. NVIDIA's revenue jumped by over 70% to over $78 billion.

CrowdStrike, a top player in the cybersecurity industry, will release its results on Tuesday. These results raise concerns that new AI tools will disrupt the cybersecurity industry.

The other top companies to watch this week will be Ross Stores, Target, AutoZone, Veeva Systems, Marvell Technology, and Kroger.

US non-farm payrolls data 

The S&P 500 Index will also react to the latest US non-farm payrolls (NFP) report, which will come out on Friday. These numbers are expected to show that the labor market softened a bit in February after rebounding in the previous month.

Economists expect the upcoming report to show that the economy created 60k jobs in February, much lower than the 130,000 jobs it created in the previous month. The unemployment rate is expected to remain unchanged at 4.3%.

A strong labor market will likely push the Federal Reserve to maintain a more hawkish tone in the coming meetings. The most recent minutes showed that some Federal Reserve officials supported hiking interest rates as inflation remained above the target.

Private credit concerns

Meanwhile, the S&P 500 Index will react to the ongoing happenings in the private credit industry, which has been sending mixed signals in the past few weeks.

The crisis in the sector started a few months ago when Blue Owl, a major player in the industry, attempted to merge two funds: one private and another public.

This crisis escalated recently when the company sold a loan portfolio and suspended redemptions. Last week, a fund overseen by Apollo Global Management also lowered its dividends as defaults rose.

As a result, most stocks in the private credit industry like Apollo, KKR, Ares, and Blue Owl were among the top laggards in the S&P 500 Index.