- The Dow Jones rose another 100 points on Monday as thin bullish momentum persists.
- US ISM PMI figures came in firmer than expected for April, bolstering market confidence.
- Investor risk appetite remains tepid overall as the US continues to battle its own trade expectations.
The Dow Jones Industrial Average (DJIA) rose around 50 points on Monday, extending the ongoing equity recovery even as investor sentiment continues to churn in the face of constantly changing trade policies from the US administration. The Federal Reserve (Fed) is poised to deliver another rate call this week, and Fed policymakers are broadly expected to maintain their wait-and-see approach. Rate markets have fully priced in another hold on rates this Wednesday.
Trade policy inconsistency remains the single large cloud hanging over equity markets, keeping bullish momentum tepid overall. US Treasury Secretary Scott Bessent noted on Monday that the Trump administration is expecting some form of trade deal from up to 17 trading partners, a far cry from United States (US) President Donald Trump’s previous claims several weeks ago of over 200 countries scrambling to offer trade deals. President Trump’s own claims may have been too lofty a goal to set, as only 195 countries are formally recognized to exist in the world.
US ISM Services Purchasing Managers Index (PMI) figures came in much stronger than expected in April, rising to 51.6 MoM, entirely flouting the forecast dip to 50.6 from the previous 50.8. The firm upside beat helped to bolster key industrial sector stocks. However, upside gains were firmly offset by further declines in the energy and general consumer goods sectors.
Read more stock news: Palantir stock pauses rally ahead of Monday earnings release
Dow Jones price forecast
Monday’s cautious yet determined bullish push has inched bids even closer to the 200-day Exponential Moving Average (EMA) near 41,600. The Dow Jones has recovered nearly 9.5% from its April 21 low of 37,853, closing in the green for all but two of the last nine consecutive trading days.
Despite a firm technical recovery, the DJIA remains down over 8% from 2025’s peak bids near 45,070. Lacking any firm technical downside signals, topside momentum remains the default positioning stance, however technical oscillators are beginning to flash warnings of overbought conditions, meaning daily Dow Jones candles could be poised for a breather near key moving averages.
Dow Jones daily chart
Economic Indicator
Fed Interest Rate Decision
The Federal Reserve (Fed) deliberates on monetary policy and makes a decision on interest rates at eight pre-scheduled meetings per year. It has two mandates: to keep inflation at 2%, and to maintain full employment. Its main tool for achieving this is by setting interest rates – both at which it lends to banks and banks lend to each other. If it decides to hike rates, the US Dollar (USD) tends to strengthen as it attracts more foreign capital inflows. If it cuts rates, it tends to weaken the USD as capital drains out to countries offering higher returns. If rates are left unchanged, attention turns to the tone of the Federal Open Market Committee (FOMC) statement, and whether it is hawkish (expectant of higher future interest rates), or dovish (expectant of lower future rates).
Read more.
Next release:
Wed May 07, 2025 18:00
Frequency:
Irregular
Consensus:
4.5%
Previous:
4.5%
Source:
Federal Reserve
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