- The Dow Jones climbed 450 points on Tuesday as investors brush off tariff fears.
- President Donald Trump pivoted on his threats of day-one tariffs.
- Tariff threats from the White House are still leaking through, now for February.
The Dow Jones Industrial Average (DJIA) absorbed newly-minted President Donald Trump’s last-minute pivot away from enacting sweeping tariffs on his first day in office with jubilation. The major equity index climbed over 400 points and is now testing the 44,000 handle for the first time since mid-December.
Equity markets caught a firm bid after incoming President Donald Trump failed to enact a package of tariffs that would have levied significant fees across the board on most imported goods on his first day in office. Donald Trump is still pushing his threats of enacting stiff import taxes on some of his closest allies, including Canada and Mexico, but investors are willing to call his bluff now that tariffs have fallen into the usual cycle of eternally coming “in a couple of weeks”, a common box that many of Donald Trump’s bespoke campaign promises tend to fall into.
Economic data remains limited throughout the rest of the week, at least until Friday’s S&P Global Purchasing Managers Index (PMI) print, leaving investors to grapple with political headlines as traders readjust to life under the ‘Trump two-step’. After a four-year hiatus, traders will have to get comfortable with Presidential musings delivered via social media apps and inconsistent policy claims that clash with previous statements, often sent only hours apart.
Dow Jones news
All but five of the Dow Jones’ listed securities are gaining ground on Tuesday, with gains being led by 3M (MMM) leading the charge higher after a firm beat of Q4 earnings forecasts. 3M’s fourth-quarter performance outpaced analyst expectations enough to earn a 5% upswing to $148 per share, although the company’s annualized performance came in slightly softer than expected.
Dow Jones price forecast
The Dow Jones gained further ground on Tuesday as investors bid the index back into the high end, keeping their eyes locked on record peaks set in late November just above 45,000. Despite a recent slow grind into the low end, price action has pivoted firmly bullish in the near-term, with all but one of the last six straight trading sessions closing higher.
More patient technical traders will be waiting for a fresh stop and a pullback to confirm a higher low before reloading on fresh bids. Despite a firm bounce, the Dow’s strong plunge from record highs dragged the index worryingly close to the 200-day Exponential Moving Average (EMA) near 41,300.
Dow Jones daily chart
Economic Indicator
S&P Global Composite PMI
The S&P Global Composite Purchasing Managers Index (PMI), released on a monthly basis, is a leading indicator gauging US private-business activity in the manufacturing and services sector. The data is derived from surveys to senior executives. Each response is weighted according to the size of the company and its contribution to total manufacturing or services output accounted for by the sub-sector to which that company belongs. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the private economy is generally expanding, a bullish sign for the US Dollar (USD). Meanwhile, a reading below 50 signals that activity is generally declining, which is seen as bearish for USD.
Next release: Fri Jan 24, 2025 14:45 (Prel)
Frequency: Monthly
Consensus: –
Previous: 55.4
Source: S&P Global
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