The Dow Jones Index has jumped by nearly 10% this year and is now hovering near its all-time high. It has risen by 19% in the last 12 months and 190% in the last decade. The index is expected to experience volatility next week as traders react to corporate earnings, US consumer inflation, and new developments on the US-Iran conflict.

Dow Jones to React to US Earnings Season

The Dow Jones and other major indices like the S&P 500 and Nasdaq 100 will react to the start of the earnings season, which officially begins on Tuesday. Five banks, including JPMorgan, Bank of America, Goldman Sachs, Citigroup, and Wells Fargo, will publish their earnings on that day. Morgan Stanley, Bank of New York, and PNC will report their earnings the following day.

Analysts expect these banks to deliver strong results, supported by relatively high interest rates and robust activity in trading and investment banking businesses. A FactSet report indicates that Wall Street analysts predict companies in the S&P 500 Index will achieve earnings growth of 23.6%. If realized, this would mark the second consecutive quarter of earnings growth exceeding 20%.

US CPI Data to Give Hints on Fed’s Next Action

The Dow Jones Index will also react to Tuesday’s US consumer price index report. Economists expect the data to show that the headline CPI dropped slightly in June as energy prices fell. The headline CPI is expected to come in at minus 0.1% on a month-on-month basis and at 4% on a year-on-year basis.

These numbers follow a weak nonfarm payrolls report, which showed the economy added just 57,000 jobs in June, missing analysts' estimate of 114,000. A higher inflation rate than expected could raise the possibility of a more hawkish Federal Reserve. US bond yields have risen, with the ten-year yield remaining above 4.56%.

US-Iran Tensions Remain

The Dow Jones Index faces additional volatility due to US-Iran tensions. President Donald Trump stated this week that the ceasefire was over as the US and Iran exchanged fire. Trump warned that the US would destroy Iran if it killed or attempted to kill him. In a statement on Saturday, Mojtaba Khamenei vowed that Iran would avenge the killing of his father. Signs of escalation could lead to higher crude oil prices, which may negatively impact US stocks.

U.S. stocks were higher on Tuesday, with the Dow Jones index gaining around 100 points. AEVEX Corp shares rose sharply after the company secured a $50 million U.S. Air Force contract to expand unmanned mission-support capabilities. The contract includes $27 million in initial funding and supports continued production of AEVEX’s long-range precision strike platform. Consequently, AEVEX shares jumped 11.8% to $20.07 on Tuesday.

Other Notable Movers

Abivax SA shares jumped 34.2% to $129.00 after the company announced topline results from ABTECT Maintenance Part 2. Additionally, BTIG maintained a Buy rating on the stock and raised its price target from $150 to $175.

AeroVironment Inc gained 20.4% to $167.34 after the company reported better-than-expected fourth-quarter financial results. Unusual Machines Inc surged 11.1% to $21.37 in sympathy with AeroVironment Inc after the drone and defense technology company reported a fiscal fourth-quarter double beat.

Air Products and Chemicals Inc gained 8.6% to $294.67 after the company announced it will not proceed with the Louisiana Clean Energy Complex project. The company also announced it is finalizing its marketing and distribution agreement with Yara for renewable ammonia from the NEOM Green Hydrogen Project.

Watts Water Technologies Inc gained 6.2% to $381.18 after Barclays analyst William Grippin upgraded the stock from Equal-Weight to Overweight and raised the price target from $317 to $414. Tradeweb Markets Inc rose 6.2% to $97.82 after Goldman Sachs analyst Alexander Blostein upgraded the stock from Neutral to Buy and raised the price target from $128 to $146.