Dow Jones Forecast: DJIA falls after weak data & Trump's trade tariff update
U.S. stocks are falling after weaker-than-expected data raises concerns over the health of the US economy, and as Trump rattles the markets with more trade tariff uncertainty. Data showed that US jobless claims were higher than expected, rising to 248K up from 247K and defying expectations of a decline to 240K. Meanwhile, US producer price inflation also remained muted in May, another sign that tariffs have yet to increase prices.
Share this:
US futures
Dow futures -0.42% at 42,685
S&P futures -0.1% at 6017
Nasdaq futures 0.01% at 21850
In Europe
FTSE -0.02% at 8868
DAX -0.86% at 23779
- US PPI rises 0.1% MoM & jobless claims rose to 248k
- Trump to send tariff letters to trading partners
- Boeing falls after plane crash
- Oil eases but remains close to its 2-month high on geopolitical tensions
US data shows signs of weakness, Trump trade warning
U.S. stocks are falling after weaker-than-expected data raises concerns over the health of the US economy, and as Trump rattles the markets with more trade tariff uncertainty.
Data showed that US jobless claims were higher than expected, rising to 248K up from 247K and defying expectations of a decline to 240K. Meanwhile, US producer price inflation also remained muted in May, another sign that tariffs have yet to increase prices.
The PPI report rose 0.1% month on month below forecasts of a 0.2% increase. This is the fourth straight month that the data showed tame inflation.
The data comes after yesterday's US CPI inflation, which was also cooler than expected. This means that the impact of higher tariffs on the US economy has been modest so far. However, price pressures are expected to ramp up in the second half of the year as companies look to pass on the increased costs to their consumers.
However, tame inflation is fueling expectations that the Federal Reserve could cut interest rates sooner, pulling the US dollar lower.
Meanwhile, the US and China agreed to a trade framework yesterday, which puts them back where they were after the Geneva talks. However, Trump warned that he will be sending take-it-or-leave-it letters to swathes of trading partners over the coming two weeks, informing them of their reciprocal tariff levels. This announcement has rattled the market ahead of the July 9 reciprocal tariff deadline.
Corporate news
Oracle is rising over 9% after the cloud computing group lifted its annual revenue growth target and highlighted solid demand from customers aiming to harness AI.
Boeing is falling over 8% after the Air India aircraft, reported to be a 787 Dreamliner, crashed minutes after taking off.
GameStop is falling 15% after the video game retailer posted a decline in Q1 revenue. Customers are increasingly opting for digital downloads.
Dow Jones – technical analysis.
The Dow Jones recovery from April lows pushed above the 200 SMA before running into resistance around 42,800. The price is easing lower, testing the 200 SMA at 42,600. Meanwhile, the 20 SMA is guiding the price higher. Should the 200 SMA hold, buyers will look to extend gains above 43,150 towards 44,000. Should sellers break below the 200 SMA and the 20 SMA at 42,400, the door opens to 41,800 horizontal support.
FX markets – USD falls, EUR/USD rises
The USD is falling after weaker-than-expected US jobless claims and inflation, which suggests that a summer Fed rate cut could be in play.
The EUR/USD is surging to a 2.5-year high due to the weak U.S. dollar, even as ECB headlines remain relatively weak. Growth in the region is still stagnant, and ECB policymakers have offered a mixed message regarding the easing cycle.
GBP/USD is rising above 136 on USD weakness, despite the UK GDP contracting by more than expected in April. UK GDP contracted 0.3% MoM in April, worse than the 0.1% contraction forecast, marking the steepest decline in almost 18 months. This comes as consumers and firms are navigating rising unemployment, increasing taxes, and Trump's trade tariffs.
Oil eases but remains close to a 2-month high.
Oil prices are easing but remain close to an almost two-month high as Middle East tensions escalate, raising concerns of a potential disruption to supply.
The US is moving some personnel out of the Middle East on reports that Israel could launch an operation into Iran in the coming days. As a result, the risk premium on the oil has spiked, lifting the price sharply yesterday.
Meanwhile, news that the US and China have reached an agreement to supply a trade framework could help the oil demand outlook.
Related tags:
Open an account in minutes
Experience award-winning platforms with fast and secure execution, and enjoy tight spreads from 0.5 pts on FX and 0.3 pts on indices.
Economic calendar
Web Trader platform
Our sophisticated web-based platform is packed with features.
Related articles
Nasdaq 100 Forecast: NDX Falls as the tech rout continues and oil prices soar
U.S. stocks are pointing to a modestly lower open after a sharp AI sell-off yesterday, as telecom stocks slide. Brent rises towards $115 adding to inflation pressures ahead of the FOMC rate decision.
S&P 500 Forecast: SPX falls, led by tech after Meta, Tesla earnings
U.S. stocks are falling sharply on Thursday, led by the tech sector, as Meta Platforms' negative free cash flow unnerved markets, while oil prices continued rising, adding to inflationary concerns.
S&P 500 Forecast: SPX rises after SpaceX jumps, Meta up next
U.S. stocks are pointing to a moderately higher open as investors digest the latest corporate earnings and developments in the AI sector ahead of more results from Tesla and Meta Platforms later today.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.forex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.