- The Dow Jones gained 150 points on Tuesday at its peak.
- The Fed’s latest rate call looms ahead in the midweek.
- Tariff threats from US President Trump hang over the markets.
The Dow Jones Industrial Average (DJIA) rose around 250 points on Tuesday at its highest point, climbing one-half of one percent before settling to a more pedestrian +150 points on the day, and chalking in a fresh eight-week high as investors shrug off fresh volatility in the face of renewed trade war threats from United States (US) President Donald Trump. The Federal Reserve’s (Fed) latest rate call is on the cards for this week. While traders are always on the lookout for signs of future rate cuts from the Fed, market attention has been split between a fresh round of tariffs being threatened by President Trump and the tech sector getting dominated by new Chinese entrants to the space.
US Durable Goods Orders contracted further in December, falling 2.2% versus the expected rebound of 0.8%. However, the figure remains well within recent norms. Durable Goods Orders Excluding Automotive purchases rose 0.3%, falling just shy of forecasts but still recovering from the previous month’s -0.2% contraction. It’s no surprise the pace of vehicle purchasing is slowing: US consumers are saddled with nearly $1.7 trillion in automotive debt, representing nearly a tenth of all consumer debt, including mortgages, with car payments outpacing student loans or credit cards.
US President Donald Trump hit the ground running late Monday, revitalizing his sweeping tariff threats and renewing his promises to impose stiff import fees on a wide range of foreign goods and entire industry sectors. The latest iteration of President Trump’s plans to tax US consumers until foreign businesses move their factories include ambiguous levies on steel, copper, aluminum, various and “other” semiconductors, as well as foreign microprocessors in general.
Convincing all of these sectors to move production to the US is a tall bid as the US is generally cost-prohibitive to construct factories in, and US labor tends to command a level of wages that are multiples above the typical wages found in other countries where industrial goods are produced in large quantities. Import fees are unlikely to have much effect except to drive inflation and suppress consumer spending.
The Fed is slated to deliver its latest rate call on Wednesday. No moves on the fed funds rate is expected this week, but traders will be tuning in for any developments in the warming drama between Fed Chair Jerome Powell and President Trump. The Fed enjoys a high level of autonomy that puts control of interest rates out of reach of the White House, a fact that President Trump has lamented about in the past. Donald Trump’s latest statements that he will “demand” lower interest rates are sure to weigh on Chair Powell’s press conference this week.
Dow Jones news
Despite some thin losses spread around the bottom half of the Dow Jones. Key industrial leaders are gaining ground, outpacing the losers and bolstering the overall equity index. Boeing (BA) rose 6.5% to $186 per share, followed by Salesforce (CRM) which climbed 5.5% to $366 per share.
Dow Jones price forecast
The Dow Jones Industrial Average is well on its way to etching in a third straight positive week, a welcome reprieve for bulls after struggling to recover their footing through a six-week backslide that kicked off at the Dow’s record highs above 45,000 last November. The DJIA is set to break through previous peaks and set new all-time highs.
Dow Jones daily chart
Dow Jones FAQs
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.
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.
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.
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD climbs above 0.6200 amid broad USD weakness and trade jitters
The Australian Dollar extended its advance on Thursday, climbing toward the 0.6240 zone. The pair built on recent strength as the US Dollar Index slid further toward multi-month lows near the 101 area. This move came after markets digested the White House’s confirmation of a steep 145% tariff on Chinese goods, combined with a cautious Federal Reserve tone.
EUR/USD surges higher as tariff walk-back eases tensions further
EUR/USD roared into its highest bids in nearly two years on Thursday, breaching and closing above the 1.1200 handle for the first time in 21 months. Market tensions continue to ease following the Trump administration’s last-minute pivot away from its own tariffs, sparking a softening in US Dollar flows.
Gold rises to record high near $3,200 on US-China tariff war
Gold price surges to near an all-time high around $3,190 during the early Asian session on Friday. The weakening of the US Dollar and escalating trade war between the United States and China provide some support to the precious metal.
Bitcoin miners scurry to import mining equipment following Trump's China tariffs
Bitcoin miners are reportedly scrambling to import mining equipment into the United States following rising tariff tensions in the US-China trade war, according to a Blockspace report on Wednesday.
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.