The Dow Jones Index futures bumped up in the premarket trading on Thursday as traders reacted to a federal court ruling against President Donald Trump’s reciprocal tariffs and upbeat earnings from tech giant, Nvidia. The Index closed Wednesday’s session down by 0.58% after Federal Reserve’s May 6-9 meeting minutes showed that FOMC members were uptight about lowering interest rates.
Trade tariffs have exerted pressure on the US economy and investors have been looking forward to easing in the form of interest rate cuts. However, the Fed minutes revealed that FOMC members were still apprehensive over the inflationary impacts of the tariffs.
Meanwhile, the Court of International Trade ruled on Wednesday that Trump overstepped his power in ordering reciprocal tariffs against nearly all nations in the world. The court gave up to June 7 for the administration to rescind the tariffs, but the government has already initiated an appeal process. Nonetheless, the sentiment is already in play, and that will likely push the Dow Jones Index to the upside.
Tailwinds for the Dow Jones Index (INDEXDJX: .DJI)also emanate from Nvidia’s forecast-beating earnings released in aftermarket hours on Wednesday. The AI chips giant reported revenues of $44.1 billion for the quarter ending April 30, a 69% year-over-year jump and up 12% from Q4 2024 earnings. In addition, it reported earnings per share (EPS) of $0.96, beating analysts’ consensus forecast figure of $0.93 and gave a revenue guidance of $45 billion for the current quarter.
Nvidia (NASDAQ: NVDA) was the market bellwether for a large part of 2024 and its latest figures will certainly trigger a renewed confidence in the tech industry and the broader equities market. Looking ahead, US Personal Consumption Expenditure (PCE) figures will be out on Friday, and that will likely inform the Fed’s next interest rate decision based on inflation trajectory.
Dow Jones Index Prediction
The Dow Jones Index will likely head upwards if the momentum keeps the action above the 42,000 points mark. That will likely see the first resistance encountered at 42,430. However, a stronger bullish momentum will breach that mark and potentially send the Index higher to test 42,812 points.
On the other hand, the momentum will likely shift to the downside if the Index goes below 42,000 points. In that case, the action will likely go lower and find the first support at 41,750. Breaking below that level will invalidate the upside narrative. Also, an extended control by the sellers will probably send the Dow lower to test 41,395 points.
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