The Schwab US Dividend Equity ETF (SCHD) has staged a strong recovery since bottoming at 23.85p in April when Donald Trump launched his retaliatory tariffs. It has jumped by 11% to the current 26.50p, its highest point since May 20th. This article provides a forecast for June and the potential catalysts to watch.
SCHD ETF stock price technical analysis
The daily chart shows that the Schwab US Dividend Equity ETF has staged a strong rally in the past few weeks, moving from a low of 23.85p to 26.50p. It has already moved above the 38.2% Fibonacci Retracement level at 26.10p.
The stock also rose slightly above the 50-day Exponential Moving Average, a sign that bulls are gaining control. However, the Average Directional Index (ADX), a popular indicator, has plunged to almost 10. ADX measures the strength of a trend, with a figure of 20 and below signaling that an asset is losing momentum.
The other risk is that the SCHD ETF remains below the 100-day EMA, meaning that it is finding some resistance. It has also formed a small rising wedge pattern, a popular bearish reversal sign, comprising two ascending and converging trendlines.
This wedge is happening after the stock crashed from the year-to-date high of $29.23, meaning that it is part of a bearish pennant pattern.
Therefore, there is a risk that the ETF will end the month lower than it is today. If this happens, it may drop to the next support level at $25 in June. On the flip side, a move above the 23.6% retracement point at $27.30 will invalidate the bearish outlook as it will signal that sellers are still left in the market.
Key catalysts for the Schwab US Dividend Equity ETF in June
The SCHD ETF wavered in May, even as most companies in the fund published their quarterly earnings. Investors largely assumed the recent earnings season because the US had not implemented the reciprocal tariffs by then. As such, the first quarter numbers did not greatly impact these levies.
Trade will be the first major catalyst for the fund as signs of escalation will drag it lower. There are signs that an escalation will happen as China and the US have accused each other of violating the recent deal.
China accuses the US of implementing policies that hurt its interests, including export controls and discriminating against its students. The US accuses the US of blocking sales if its rare earth minerals.
Therefore, any trade-related news from the US and EU will impact US stocks and the SCHD.
The other minor catalyst for the SCHD ETF will be the Federal Reserve decision scheduled for June 18. Historically, this is usually a major event because it lets the bank forecast what to expect. This meeting will likely not impact stocks because the Fed has already hinted that it will not cut rates soon.
Further, traders will watch the ongoing debate in Congress on the Big Beautiful Bill and whether the Senate will pass it. While this bill cuts some spending, it also slashes taxes and boosts the national debt. This trend may push investors away from the United States, a country with almost $37 trillion in debt.
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