Dow Jones futures plunge as risk aversion increases after Trump’s comments

Dow Jones futures decline as market caution emerges after Trump’s remarks lacked clear signals on Iran.
Trump said Iran is no longer a major threat but warned military strikes could intensify in the coming weeks.
Travel, mining, and technology shares advanced, led by SanDisk Corp., which surged about 9% on Wednesday.

Akhtar Faruqui FXStreet

Dow Jones futures decline 0.88%, below 46,400 during European hours on Thursday, ahead of the United States (US) regular market open. Meanwhile, S&P 500 and Nasdaq 100 futures fall 1.1% and 1.4% below 6,550 and 23,900, respectively, at the time of writing.

US equity futures drop sharply on Thursday after US President Donald Trump warned in a national address that Washington would hit Iran extremely hard within two to three weeks, even suggesting the country could be pushed into the “Stone Ages.”

In Wednesday’s regular US session, Wall Street extended its advance as oil prices eased, with the Dow Jones rising 0.48%, the S&P 500 gaining 0.72%, and the Nasdaq 100 climbing 1.16%, supported by strong performances in Alphabet and other major stocks.

Moreover, Travel, mining, and technology shares moved higher, led by SanDisk Corp., which jumped around 9%. Gold miners, including AngloGold Ashanti and Newmont, also advanced as bullion prices posted a fourth consecutive daily gain.

US equities were supported as investors reassessed the Federal Reserve’s (Fed) policy outlook amid evolving geopolitical risks, growth uncertainties, and persistent inflation pressures. Moreover, the median dot plot continues to signal one 25-basis-point rate cut later in 2026, while some policymakers now expect no rate cuts this year.

Dow Jones FAQs

What is the Dow Jones?

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

What factors impact the Dow Jones Industrial Average?

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

What is Dow Theory?

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

How can I trade the DJIA?

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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