Dow Jones futures stay muted due to market caution ahead of US PMI data
- Dow Jones futures steady as traders adopt ahead of US PMI data.
- US S&P Global Manufacturing and Services PMIs are expected to ease in September.
- Wall Street hit fresh record highs on Monday, driven by gains in megacap tech stocks.
Dow Jones futures remain steady near 46,700 during European hours on Tuesday, ahead of the United States (US) regular opening. Meanwhile, the S&P 500 futures hold near 6,750, while Nasdaq 100 futures remain close to 25,000.
US index futures were little changed on Tuesday as traders adopt caution ahead of the preliminary reading of the US S&P Global Purchasing Managers Index (PMI) data for September later in the day, along with awaiting US Federal Reserve (Fed) Chair Jerome Powell’s speech to gain further cues on policy outlook. Attention will shift toward the August Personal Consumption Expenditures (PCE) Price Index data, the Federal Reserve’s preferred inflation gauge, which is expected to signal subdued price pressures.
Wall Street notched another record-setting rally on Monday, with the three major averages closing at all-time highs amid megacap tech gains. The Dow Jones climbed 0.14%, with the S&P 500 and Nasdaq Composite adding 0.44% and 0.7%, respectively, with both marking their third consecutive session of record highs.
US stocks gained after Nvidia shares surged nearly 4% on news that the chipmaker will invest $100 billion in OpenAI to expand data centers. Meanwhile, Oracle climbed 6.3% on leadership changes. Apple advanced 4.3% on robust demand for the iPhone 17, while Tesla rose 1.9% to new 2025 highs. Still, traders remain cautious about whether the AI rally can keep driving markets, especially amid concerns over elevated valuations.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.
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