The Dow Jones Index (INDEXDJX: .DJI) opened the week on a losing note, going down by 0.01% to read 41,634 points at the time of writing. The decline follows the injection of a new adverse trade tariff sentiment by US President Donald Trump over the weekend, which has added downward pressure on equities.
The Index has been on a downtrend since mid-February and it lost 2.4% in the last five trading sessions. President Trump said on Sunday that the April 2 “freedom day” will see all countries come into the purview of US reciprocal tariffs. That marked a significant shift from his initial stance which targeted countries with a trade surplus over the US.
Beyond the reciprocal tariffs, April 2 could also see Trump announce tariffs against semiconductor, pharmaceutical, in addition to the 25% tariffs on automobiles revealed last week. Expansion of the scope of the trade tariffs could have a stronger effect on the broader global economy than previously thought, raising the downside risk for traders.
As a result, the coming days will see reduced buying volumes in equity markets. Down then line, the March Non-Farm Payroll (NFP) figures will be out on Friday and will provide clues on the trajectory of the US economy.
Dow Jones Index Forecast
The momentum on the Dow Jones Index signals that the downside will likely prevail if the index fails to break above the 41,767 points pivot mark. With the sellers in control, the Dow will likely find its initial support at 41,242. An extended downward momentum will break below that level and will potentially test the second support at 40,827.
Conversely, going above 41,767 will usher in the buyers to take control. That could see the Index reclaim the 42,224 points level. In addition, a stronger upward push will break above that level and invalidate the downside narrative. Also, such momentum could send the index higher to test $42,627 points.
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