The Nasdaq has traded sideways since early June while the S&P 500 sits just 1% above its June 2 high, as an unusually strong earnings season winds down. Attention now shifts to the August jobs report and a busy week of chip and cybersecurity earnings, with markets watching for signs on the Federal Reserve's next move.
Earnings season closes out strong
The S&P 500 trades just 1% above its June 2 high, while the Nasdaq has moved sideways since early June. As of Friday, 488 of 503 S&P 500 companies had reported quarterly results, according to FactSet. Some 85% of those companies beat expectations, well above the typical mid- to high-70s rate, CFRA reports. Collective earnings for the quarter climbed 49%, versus initial forecasts for a 20% gain. CFRA notes the results were distorted by tariff refunds and oil profits, so upcoming quarters may prove harder to compare.
Fed focus turns to the jobs report
At Jackson Hole on Friday, Federal Reserve Chairman Kevin Warsh gave passing grades to the economy and job market, but placed the Fed's focus on bringing inflation under control. That keeps eyes on the Federal Open Market Committee's mid-month policy meeting. The coming week's August payrolls report will factor into that decision, with economists expecting a net 65,000 gain in nonfarm payrolls, including 45,000 in the private sector, per the FactSet consensus. The unemployment rate is seen ticking up to 4.2% from 4.1%. Warsh's hawkish tone has already raised expectations for a September 16 rate hike decision.
Chip and software earnings crowd the calendar
Broadcom delivers fiscal third-quarter results Wednesday, with analysts expecting adjusted earnings of $3.22 a share on sales of $29.24 billion, which would mark its fifth straight quarter of accelerating sales growth. Cybersecurity names also report: Palo Alto Networks is expected to post adjusted EPS of 98 cents, up 3%, with revenue rising 32% to $3.35 billion, while Zscaler's adjusted EPS is expected to grow 22% to $1.09 a share. Snowflake, up more than 50% in 2026, reports Wednesday after the close, with analysts modeling adjusted EPS of 52 cents, up 48%, on revenue rising 29% to $1.57 billion.
Source: Investor's Business Daily
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