This past week has been a busy one for the markets as the latest inflation numbers come out and, of course, big SpaceX The IPO is coming up on Friday. So far, the stock market has continued to perform well in 2026, with S&P 500 (SNPINDEX: ^GSPC)Gains are sitting at around 9% as of June 12th. It is very impressive considering how well the index has performed in recent years. As of 2023, it has increased by 94%.
How the rest of the year goes, however, could depend on a number of factors. There are three things to watch this week that could be good indicators of how the market will perform in the coming weeks and months.
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1. How SpaceX stock performed in its first full week
Although SpaceX had a successful first day, up 19%, how it does for the rest of the year is a big question. Its valuation is north of $2.1 billion, which just makes it one of the most valuable companies in the world.
The big question this week is whether that valuation will weigh on the stock or whether momentum will remain strong. While SpaceX gives investors the ability to pursue growth opportunities in many areas, including rocketry, artificial intelligence, and communications, it’s also not without merit. If the stock is booming this week, that could indicate that the investor’s appetite for risk remains high.
I thought that SpaceX’s IPO might have higher asking prices, which might have had a negative impact on the markets, but that wasn’t the case, at least not on the first day. After a full week, there will be a clear indication of how strong the appetite for risk is and how willing investors are to look beyond sky-high prices.
2. The upcoming Fed meeting
The Federal Reserve will announce its interest rate decision this week under new Fed chairman Kevin Warsh. It will be a highly anticipated event because it will provide important information on how hawkish or dovish Warsh is and whether prices will rise or fall this year.
With inflation rising to the highest levels since 2023, according to the latest figures, it does not make the case for lowering interest rates any easier, which the US president has been pushing for. Perhaps more important than the actual rate decision is what Warsh says about the economy and if it’s any indication of what the future may hold.
If there are hints that interest rates could drop this year, that could be the fuel that sends SpaceX and other speculative investments higher. If, however, there are signs that prices may not be falling, that could discourage investment and negatively impact the S&P 500.
3. If there is a peace agreement between the US and Iran
What may be the most important issue is what happens with Iran, and if the US reaches an agreement that leads to the opening of the Strait of Hormuz. On Friday, there were reports that a deal could happen soon and that something could be signed this weekend. But there have been similar reports in the past, and the situation remains volatile and uncertain.
If, however, this time the agreement appears to be real and there is an end to the conflict, that could be good news for the market. It would have a positive impact on lowering oil prices, reducing inflation, and strengthening the case for lower interest rates. That in turn can lead to greater speculation and trading by retail investors. Therefore, this may be the single most important development to watch out for, as it can have far-reaching effects on the entire stock market.
^SPX data by YCharts
Why long-term investors need not worry
The good news for long-term investors, however, is that if you have a long investment horizon, it can still be a very good idea to invest in the S&P 500 index. Billionaire investor Warren Buffett has invested in the market for decades and is not concerned with economic forecasts and short-term developments. It’s a reminder why long-term investing is still a good option, no matter what happens in the short term.
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David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a policy of disclosure.
The post 3 Things to Watch This Week That Could Bigger How the IS&P 500 Does From Here Onward was published by The Motley Fool.
