The S&P 500 Index has wavered and is hovering near its all-time high. The next few weeks could be important as top companies report earnings and the odds of a Federal Reserve rate hike decline.
The index ended the week at 7,722 points, slightly below its record of 7,817. Wall Street Analysts Are Bracing for a Strong Earnings Season The third-quarter earnings season is about to kick off, and analysts expect that it will be another strong one.
2%. In reality, however, the final growth rate will be much higher than that.
For example, the second quarter growth rate was over 50%, much higher than the expected 28%. Read Also: SCHD ETF Falls to a Crucial Level as Bottoming Signs Emerge Technology companies are reporting strong growth because of the ongoing artificial intelligence boom that has led to a surge demand for equipment.
For example, in a statement this week, Micron Technology (NASDAQ:MU) said that its revenue jumped to a record $54 billion in the last quarter. 2%.
Other top technology companies have also published strong financial results lately. Nvidia’s (NASDAQ:NVDA) results showed that its revenue jumped to $104 billion in Q2, with management guiding to a 77% annual growth rate next year.
And this week, it unveiled an additional $150 billion share buyback. Notably, the earnings growth is happening at a time when the index is trading at a bargain.
Additionally, the US published mixed macro data this week. The closely watched PCE inflation report rose at a slower pace in August, while the economy created just 29,000 jobs.
As a result, the Fed will likely pause its rate hikes this year. SPX Index Has Formed Bullish Technicals S&P 500 Index chart | Source: TradingView Technicals suggest that the S&P 500 Index may be on the verge of a breakout.
It has formed an inverted head-and-shoulders pattern, which is a common bullish reversal pattern. At the same time, it has held steady above the 50-day Exponential Moving Average (EMA) and the Supertrend indicator.
Therefore, the index may have a strong bullish breakout in the near term. A move past its all-time high will likely drive it to 8,000 by the end of the year, which is in line with Oppenheimer, Barclays, and Goldman Sachs (NYSE:GS) estimates.
