Dow Jones Forecast: DJIA eases from record high with data in focus

US futures                                         

Dow futures -0.2%, S&P futures -0.2%  & Nasdaq futures -0.7%

In Europe                                                                        

FTSE -0.2%6 & DAX 0.15%

• Stocks slip lower on Thursday
• Geoplitics remain on the radar
• US jobless claims rise to 208k ahead of tomorrow’s NFP
• Oil rebounds 2%

Stocks ease back from record high

US stocks are heading for a slightly lower open on Thursday after a muted close in the previous session amid mixed economic data, which is maintaining uncertainty over the Fed's path forward. The US NFP report is due tomorrow, which could be the next key catalyst.

US jobless claims rose by 8k to 208K, up from 200K in the previous week but below expectations of 213k. The four-week moving average of initial claims fell by 7000 the 212K, marking the lowest level since April 27, 2024.

The data comes after ADP payrolls JOLTS job openings pointed to a low-hire, low-fire environment. However, the ISM services PMI was stronger than expected, painting a mixed picture for the Federal Reserve and potentially encouraging a cautious stance from the central bank toward further rate cuts.

This week's data comes ahead of Friday's nonfarm payroll report, which is expected to show that headline job creation rose by 60,000, down from 64,000 in November. However, the unemployment rate is expected to decline to 4.5% from 4.6%.

The market is pricing in two Fed rate cuts this year; however, the Fed indicated one rate cut in 2026 in its December meeting.

Corporate news

Alphabet is rising almost 1% after the Google parent sees ongoing demand following its market capitalization rising above Apple's for the first time since 2019.

NVIDIA is rising 0.4% on reports that China is preparing to approve some purchases of H200 AI chips as early as this quarter, and a move that could reopen access to a key market for the chipmaker.

RTX, Lockheed Martin and Northrop Grumman are gaining between 5 to 7% as investors buy into the defence stocks following Trump floating the idea of lifting the 2027 US defence budget to 1.5 trillion U.S. dollars. These stocks are rebounding after sharp losses yesterday, when Trump vowed to block defence contractors from paying dividends or buying back shares until they accelerate weapon production.

S&P 500 forecast – technical analysis.

The S&P500 recovered from the 6500 November low, rising to a fresh record high of 6965 yesterday. The price has since eased back slightly to 6910 at the time of writing. The price continues to hold above its rising trendline and 50 SMA. Buyers will look to extend the uptrend, rising towards 7000 as the next logical level. Support is at 6885, the trendline. Below here 6820 comes into play, the 50 SMA ahead of 6715, the December low.

FX markets – USD rises, EUR/USD slips

The U.S. dollar is rising to a monthly high after US jobless claims were lower than expected. The data comes after yesterday's stronger-than-expected ISM services PMIs.

EUR/USD is falling to a fourth-month low against a stronger USD amid a souring market mood, despite eurozone unemployment unexpectedly falling to 6.3% in November, down from 6.4%. Economic sentiment indicators have also exceeded forecasts, with consumer, business, and industrial sentiment rising.

GBP/USD is edging lower for a third day on USD strength. The quiet UK economic calendar means that GBP is being driven mainly by risk sentiment. The next major macro event will be the UK employment data next week.

Oil rebounds 2%

Oil prices are rebounding after recent losses. Oil prices are rising 2%, recovering this week’s losses as fears over Venezuela ease and investors digest recent data.

Oil had been under pressure following the U.S. announcement of plans to import 50 million barrels of Venezuelan crude, adding to concerns about an already oversupplied market. However, the market also expects that increased supply will take time to ease immediate oversupply concerns.

Data is helping to put a near-term floor under crude oil prices. US crude stockpiles fell more than expected, indicating demand strength. Together with a stronger-than-expected US ISM services PMI and jobless claims have helped support prices for now.

Investors will continue to monitor geopolitical developments, particularly reports in the Wall Street Journal that Trump plans to assume long-term control of Venezuela's oil to bring prices down to $50 per barrel.

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