Dow Jones Index ended last week in the red, registering four successive loss-making sessions. The performance was initially triggered by concerns over rising US national debt, and later got exacerbated by President Donald Trump’s threats to impose 50% tariffs on imports from the European Union. That renewed the FUD sentiment previously seen in the market between February and April.
The Dow Jones Index lost 1.58%, 4.20% and 3.17% in February, Mark and April respectively, underlining the weight of trade tariff fears. However, the commencement of trade negotiations between the US and her key trading partners such as China, the UK and India resuscitated confidence. As a result, the index is currently up by 2.30% , in the month’s last week of trading.
Dow Saved by $1 Trillion Trade Tariff Pause
On Monday, markets will open to news of Trump’s backtracking on his earlier threat to start imposing the 50% tariffs on EU imports starting June 1. The US President posted on his Truth Social page that he had held a “very nice” phone call with European Commission chief, Ursula Von de Leyen, and had pushed the deadline to July 9. That eases tension in the markets and renews hope of a positive outcome in the talks. That sentiment will likely propel the Dow Jones Index to the upside in the near-term.
According to US government data, the European Union exported $607 billion worth of goods to the US in 2024, with the US exporting $370 billion the other way. Therefore, the thawing of tensions safeguards nearly $1 trillion worth of goods from harsh trade climate, which augurs well for equities.
Dow Jones Index Prediction
The Dow Jones Index pivot mark is at 41,590 points and the upside will likely prevail if action stays above that level. Primary resistance will likely be at 41,850 points. An extended control by the buyers will clear that barrier and potentially send the action higher to test 42,130 points.
On the downside, moving below 41,590 points will signal control by the sellers. The first support will likely be at 41,400 points. Breaking below that level will invalidate the upside narrative, with the resulting momentum potentially sending the index lower to test 41,190.
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