Dow Jones Forecast: DJIA wobbles after weak ADP data

US futures                                         

Dow futures -0.18%, S&P futures -0.21%  & Nasdaq futures -0.48%

In Europe                                                                        

FTSE -0.2% & DAX -0.25%

• Stocks wobble after weak ADP payrolls
• ADP payrolls fall -32k vs 5k forecast
• Trump hints at Kevin Hassett being the next Fed Chair
• Oil is rising as Russian Ukraine peace hopes fade

Stocks slip after ADP payrolls fall -32k

US futures pared earlier gains and have turned lower as investors weigh up weaker economic data, which raises concerns over the health of the US labour market.

US ADP payrolls added to evidence of a slowdown in the US job market, reinforcing expectations that the US central bank will cut interest rates in the final policy meeting of 2025. ADP payrolls fell by 32,000, the largest decline since 2023. Payrolls declined in 4 of 6 months, cementing expectations for a 25-basis-point rate reduction. However, the “bad data is good news” line wasn’t working as investors ramp up concerns over the state of the economy.

The data comes after weaker-than-expected ISM manufacturing PMI figures on Monday, and as attention turns to ISM services PMI  data later this afternoon, which are expected to show a slight slowdown to 52.1 in November from 52.4. The job and price components will be watched closely.

Adding support to the market was news that the Trump administration had cancelled interviews with finalists for the Fed chair role, firming up the view that Kevin Hassett, a monetary policy dove, will replace Fed Chair Jerome Powell in May.

Corporate news

Marvell Technology jumped 10% after the chipmaker confirmed a multibillion-dollar deal to acquire semiconductor startup Celestial AI, as it looks to expand its capacity amid an ongoing surge in AI demand.

Coinbase Global is up 2% after Bitcoin, the largest cryptocurrency, rebounded from a deep slide to 83k at the start of the week and is currently trading at a two-week high of 93K.

CrowdStrike is down over 1% despite the cybersecurity firm posting quarterly results that beat expectations and an upbeat full-year forecast boosted by record consumer additions, strong subscription growth, and rising demand for AI-linked cybersecurity tools. 

Dow Jones forecast – technical analysis.

The Dow Jones extended its recovery from 45,715, rising above the 50 SMA before running into resistance at 47,700 and easing back to 47,380. The price trades above its long-term rising channel, and its 20 and 50 SMA keep the long-term uptrend intact. Buyers will look to rise above 47,700 to extend gains towards 48,000, the October high. On the downside, support is around 47,000. A break below here brings the rising trendline support at 46,100 into play.

FX markets – USD falls, EUR/USD gains

The U.S. dollar is falling sharply, extending losses to a one-month low against a basket of currencies, as expectations for rate cuts strengthen and after Trump hinted he could nominate Kevin hazard as the next Federal Reserve chair. Hassett is considered a dove and his views are broadly in line with Trump’s.

EUR/USD is rising towards 1.17 on USD weakness and an upward revision to the eurozone composite PMI. The composite PMI registered 52.8 above expectations of 52.4 in November and finalised at a 30-month high amid A mild acceleration in Q4 growth.  

GBP/USD is rising amid A weaker U.S. dollar and following an upward revision to the preliminary services PMI report. The services PMI was revised higher to 51.3 in November, up from the preliminary reading of 58.5, but down from October's 52.3. The slowdown from October came ahead of Rachel Reeves' November 26 budget, which had prompted firms to delay investments in new products.

Oil rises on supply worries.

Oil prices are rising, recovering from yesterday's mess as the market continues to fret over a low probability that Russia and Ukraine will reach a peace deal soon after a meeting between Russia's President Putin and the US envoys concluded without a deal.

The lack of a major breakthrough in peace talks, together with ongoing Ukrainian attacks on Russian energy infrastructure, is pushing prices higher.

The weaker USD is also supporting oil prices by making it cheaper to buy crude oil in foreign currencies.

Tension will now turn to the EIA crude oil stockpile data.