The Vanguard S&P 500 ETF (VOO) crashed by over 1.10% on Friday as fresh geopolitical fears emerged. It dropped to a low of $548, down by 1.40% from its highest point this month. This article provides a VOO forecast and explores the top catalysts to watch.
FOMC and other central bank decisions
The first main catalyst that will impact the S&P 500 Index is interest rate decisions by some of the most important central banks.
The Bank of Japan (BoJ) will be the first central bank to deliver its monetary policy decision on Tuesday.
Economists expect the bank to leave rates unchanged at 0.50%. They have mixed opinions on the actions of the central bank on the bond market. Some believe that the bank will taper its bond purchases, while others see it maintaining status quo.
Historically, BoJ actions have had some impact on the US stock market because Japan is one of the biggest investors globally. Also, many American companies have a big presence in Japan.
The Federal Reserve will be the most important catalyst for the VOO ETF this week. The bank has already hinted that it will not cut interest rates this time as it observes the impact of tariffs on inflation. A dovish tilt after last week’s US inflation data will be a bullish catalyst for the stock market.
The other top central banks that may impact the S&P 500 Index this week are the Bank of England (BoJ) and the Swiss National Bank (SNB).
Israel and Iran war
The other top catalyst for the VOO ETF is the ongoing crisis between Israel and Iran that contributed to its plunge on Friday.
This conflict will likely continue, with Trump warning that the US may be involved at some point.
The two countries have continued launching missiles at each other in the past few days.
The main impact of this war on the S&P 500 Index is that it will push crude oil prices higher. Higher oil prices will make inflation stickier and reduce the odds of the Federal Reserve slashing interest rates soon.
The war could benefit oil and defense stocks like Lockheed Martin, RTX, General Dynamics, and Boeing.
G7 meeting
The other potential catalyst for the S&P 500 Index will be the upcoming G7 meeting in Canada. This meeting brings together leaders of the most advanced countries globally.
Historically, the meeting has a minor impact on US stocks. This one, however, it may have an impact as Trump is preparing to meet with leaders and reach trade agreements.
Potential deals with the European Union and Japan would be bullish for the US stock market.
Quadruple witching
The final catalyst for the VOO ETF will be Friday’s quadruple witching. This is a key event that happens four times a year when stock index futures, stock index options, stock options, and single stock futures expire on the same day.
Historically, this quadruple witching leads to market volatility and arbitrage opportunities.
VOO ETF stock price analysis
The daily chart shows that the VOO ETF stock bottomed at $442 in April and then peaked at $556 on June 11 as it formed a V-shaped recovery.
It has formed a golden cross pattern as the 50-day and 200-day Exponential Moving Averages (EMA) crossed each other. It
The Relative Strength Index (RSI) and the MACD indicators have continued rising, a sign that it is gaining momentum.
Therefore, the fund will likely continue rising as bulls target the year-to-date high of $560, its highest point in February. A move above that level will confirm more gains by invalidating the double-top pattern.
The other risk is that the VOO ETF has formed a rising wedge pattern, pointing to a retreat, potentially to $520.
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