Dow Jones Forecast: DJIA rises as US NFP beats, Middle East stays in focus

Dow Jones Forecast: DJIA rises as US NFP beats  

US futures                                         

Dow futures 0.36%, S&P futures 0.44%  & Nasdaq futures 0.65%

In Europe                                                                        

FTSE -0.28% & DAX -1%

• U.S. stocks are heading towards more record highs
• NFP records 115k jobs added in April, unemployment holds at 4.3%
• Chip stocks extend gains
• Oil falls 7% across the week

US NFP records 115k jobs added

US stocks are holding onto gains after a stronger-than-expected US non-farm payroll report, and as investors continue to monitor developments in the US – Iran war.

The US saw 115k jobs added in April, well above the 65k forecast, marking a second straight month of solid gains and the first back-to-back monthly job gains this year. The unemployment rate remained at a historic low of 4.3%, while wage growth was slightly slower than forecast at 0.2%.

The data support the view that the US labor market remains resilient despite the Iran war and the energy spike. This reinforces the view that the Fed will remain focused on inflation and likely keep rates on hold for the rest of the year. The market reaction was relatively modest, with treasury yields unmoved.

The data comes amid investors continuing to monitor developments in the Middle East, as the U.S. and Iran clashed in the Gulf, raising concerns over the fragile ceasefire and the potential for the reopening of the Strait of Hormuz.

However, President Trump was quick to confirm that the ceasefire is still in effect, easing some concerns and helping treasury yields move lower.

Corporate movers

 Microchip Technology is rising 3.9% pre-market after forecasting Q1 revenue above estimates on strong demand for its chips used in the industrial and automotive sectors.

Other semiconductor stocks have also rallied sharply this year and continue to climb, with Qualcomm rising 4.1%, while Nvidia is up 1%.

Cloudflare is falling 17% after the cloud services company said it would cut around 20% of its workforce and forecast second-quarter revenue below expectations.

CoreWeave is down 6.5% after the cloud infrastructure technology company raised the lower end of its annual capital expenditure forecast, citing higher component prices.

Dow Jones – Technical analysis

The Dow Jones has recovered from 44,810, the 2026 low, rising to a peak of 50,124. However, momentum is showing signs of slowing.

Should momentum pick up again, buyers will look to rise above 50,000 to bring 50,500, the record high, into focus.

On the downside, support is seen at 48,900, the weekly low. A break below here opens the door to 48,500, the April 30 low. Below this, the 50 SMA at 47,830 and the 200 SMA at 47,400 come into focus.

FX: USD falls, GBP/USD rises

The US dollar is falling, tracking Treasury yields lower on hopes of de-escalation in the Middle East. Progress towards a deal between the US and Iran is also reducing safe-haven demand.

EUR/USD is rising, supported by the weaker US dollar, and is on track to gain 0.4% this week. The euro has brushed off threats from President Trump to raise tariffs on European vehicles to 25% if a trade deal is not agreed by July 4.

GBP/USD is rising despite Prime Minister Keir Starmer’s Labour Party suffering a historic defeat in yesterday’s local council elections to Reform, which gained 350 seats across England, Scotland, and Wales. However, Starmer has vowed to remain Labour leader despite the heavy losses, helping bond yields fall 8bps while the pound strengthened against both the euro and the dollar.

Oil falls 7% across the week

Oil prices are paring earlier gains following renewed fighting around the Strait of Hormuz between the US and Iran, which raised concerns over the fragile ceasefire.

While oil briefly pushed above $100 a barrel, both WTI and Brent are trading around 7% lower this week.

President Trump attempted to calm concerns, telling reporters that the ceasefire was still in effect and playing down renewed hostilities around the Strait of Hormuz.

With the US approaching peak gasoline season, the market will be watching closely for signs of a deal between the US and Iran and the reopening of the strait.