The Schwab US Dividend Equity ETF (SCHD) is hovering near its all-time high as the earnings season takes shape. SCHD was trading at $27.95 on Thursday, a few points below its all-time high of $29.45. It has jumped by over 12% in the last 12 months.
This article explores the key events driving the SCHD ETF and what to expect in the next 11 months of 2025.
Federal Reserve, tariffs, and earnings
The SCHD ETF will react to three key events this year. First, it will react to the actions of the Federal Reserve, which has hinted that it will deliver two interest rate cuts this year. Some analysts anticipate that the bank will maintain a hawkish tone since inflation is expected to remain higher for longer.
Second, the SCHD fund will react to tariff news in the United States. The fund jumped for three straight days after Trump paused tariffs on Mexico and Canadian goods. It will likely continue doing well if the US pauses its tariffs on Chinese goods.
The other catalyst for the SCHD fund is the ongoing earnings season. Data shows that most companies are reporting strong numbers this year. According to FactSet, 36% companies in the S&P 500 index reported results by Friday last week. 77% of these firms released a positive EPS, while 63% of them had a positive revenue surprise.
The average earnings growth so far was 13.2%. If this is the final earnings growth rate for the S&P 500 index, it will be the highest rate since Q4’21. Strong revenue and earnings growth will lead to better stock performance.
The other indirect catalyst for the SCHD is the performance of the artificial intelligence industry, which is showing signs of slowing down. While the SCHD ETF does not have major AI plays, its impact may be impacted by its slowdown. For example, it dropped sharply last week when there was a DeepSeek scare in Wall Street.
SCHD ETF forecast
We have covered the SCHD ETF several times before, including here and here. For this part, the focus is on technical analysis and identifying potential levels.
The daily chart shows that the fund has done well in the past few months, rising from a low of $21.55 in May 2023 to the current $28. Most recently, the fund moved slightly below the lower side of the ascending channel shown in blue and then retested it. A break and retest is a highly popular continuation sign.
The ETF has moved below the 50-day Exponential Moving Average (EMA). It has also formed a rising wedge pattern. Therefore, there is a risk that the SCHD will have a strong bearish breakdown, with the next point to watch being at $26.59, the 38.2% Fibonacci Retracement level.
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