Dow Jones Forecast: Dow Jones slips after mixed NFP data

US futures                                         

Dow futures -0.46%, S&P futures -0.37%  & Nasdaq futures -0.14%

In Europe                                                                        

FTSE -1.1% & DAX -0.82%

• Stocks are modestly lower after the NFP report
• 64k jobs were added, and unemployment rose to 4.6%
• US retail sales and CPI are also due this week
• Oil slumps towards 2025 low

Stocks modestly lower after mixed NFP data

US stocks are trading modestly lower on Tuesday as investors weigh up data signalling a cooling U.S. economy, boosting expectations for further interest rate cuts from the Federal Reserve next year.

Data from the labour department showed about 64,000 jobs were added to the economy in November, which is down from 119,000 in September. October data was incomplete and showed a decline due to government spending cuts. Economists had expected 50,000 new jobs.

Meanwhile, the unemployment rate rose to 4.6% in November, up from 4.4%, the highest level since 2021. Still, the jobs data was not as bad as some had feared, which limited its impact. Furthermore, there will be another non-farm payrolls report in early January, ahead of the next Fed meeting on January 28.

The data has provided investors with greater clarity on the health of the labour market following the historic government shutdown, which had left the Fed and the market without visibility.

Based on the data, the market is pricing in at least 58 basis points of rate reductions next year, higher than the 25-basis-point signals from the Fed last week.

Attention will be turning to retail sales data tomorrow and inflation on Thursday for further insight.

Corporate news

Pfizer, the pharma giant, is modestly lower after issuing disappointing 2026 earnings guidance. Pfizer guided to a profit of $2.80-$3 per share for the coming year, below expectations of $3.05 for 2026. The company also reaffirmed its 2025 outlook.

Roku, the streaming platform, is up over 4% after Morgan Stanley upgraded the stock to overweight from underweight, citing revenue growth acceleration in H22025, suggesting it is scaling its user base, solid execution amid deepening streaming partnerships, and positioning the company well to benefit from industry tailwinds.

PayPal is up 1.5% after the payments giant filed an application to establish PayPal Bank, a final financial institution that would focus on granting loans and offering savings accounts to small businesses.

Dow Jones forecast – technical analysis.

The Dow Jones trades above its rising trendline in a bullish trend. The price ran into resistance at 48,890, the record high, and has eased back to 48,400 at the time of writing, testing the November high support. Buyers will look to extend the uptrend above 48,890 to create a higher high and reach fresh record highs. A break below 48,400 could open the door to 48,000, the rising trendline. However, a break below 47,520 is needed to negate the near-term uptrend.

FX markets – USD falls, GBP/USD gains

The U.S. dollar is falling after U.S. NFP data showed the U.S. job market cooled further in November, with unemployment rising to its highest level since 2021.

EUR/USD is rising amid a weaker USD and despite weaker-than-expected PMI data. The composite PMI, widely regarded as a good gauge of business activity, unexpectedly fell to 51.9 in December. This was below expectations of 53, down from 52.8 in November. The service setctor PMI dropped to a 3-month low and manufacturing contracted at a faster pace.

GBP/USD is rising after UK jobs data and PMIs. UK unemployment rose to 5.1%, the highest level in almost five years. This was up from 5% and was in line with economists' expectations. Meanwhile, wage growth excluding bonuses edged down to 4.6% from 4.7%, the lowest level since early 2022, though slightly above forecasts. UK PMIs showed business activity ramped up following months of uncertainty ahead of the UK Budget.

Oil slumps towards 2025 lows

Oil prices are falling around 1.5% on Tuesday, dropping towards $55 a barrel, the lowest level since May this year, on optimism of a Russia-Ukraine peace deal.

The US has offered to provide Nato- style security guarantees for Ukraine, and European negotiators reported progress in peace talks on Monday to end the Russia-Ukraine war. These developments have sparked optimism that the conflict could end sooner than initially expected.

The end of the war increases the likelihood that Russian sanctions will be eased or lifted, thereby increasing global oil supply. This comes at a time when the market is already nervous about a 2026 supply glut.

Chinese data added to concerns about the demand outlook. Chinese factory output growth slowed to a 15-month low, whilst retail sales grew at the slowest pace since December 2022 during the COVID pandemic.