Dow Jones futures gain on confirmation of the Trump-Xi meeting, US CPI awaited
- Dow Jones futures advance as White House confirmed a Trump-Xi meeting on October 30 in South Korea.
- Traders remain cautious ahead of the US inflation report, as the ongoing government shutdown causes a data blackout.
- US stock markets rose on renewed buying interest in tech stocks.
Dow Jones futures rise 0.16% to trade near 47,000 during European hours, ahead of the opening of the regular United States (US) session on Friday. The S&P 500 futures rise 0.26% to trade near 6,800, while Nasdaq 100 futures surge 0.41% to move above 25,350 at the time of writing.
US index futures advance, possibly driven by the White House confirmation that US President Donald Trump will meet Chinese leader Xi Jinping on October 30 in South Korea on the sidelines of the Asia‑Pacific Economic Cooperation (APEC) Summit.
However, market sentiment remains cautious as traders await a key US inflation report that could influence the economic and interest rate outlook. The report, delayed by the ongoing government shutdown, is expected to show persistently high prices and comes just ahead of a likely US Federal Reserve (Fed) rate cut next week. The CME FedWatch Tool indicates that markets are now pricing in nearly a 98% chance of a Fed rate cut in October and a 92% possibility of another reduction in December.
On Thursday’s regular session, the Dow Jones gained 0.31%, the S&P 500 rose 0.58%, and the Nasdaq 100 advanced 0.89%, supported by renewed buying in tech stocks. In pre-market trading, Intel price is trading higher by nearly 8% after the chipmaker reported stronger-than-expected third-quarter sales, while Target and Rivian are edging up 0.25% and 0.31%, respectively.
The US government shutdown has entered its 24th day, marking the second-longest federal funding lapse in history, with no end in sight. The GOP-backed stopgap bill failed to pass in the Senate for a 12th time on Wednesday evening.
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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