Dow Jones futures remain steady ahead of key US economic data
- Dow Jones futures move little as traders adopt caution ahead of US labor data, along with ISM Services PMI.
- Tech stocks led gains after Alphabet avoided a breakup in an antitrust case.
- The Trump administration asked the US Supreme Court to review a tariff case, seeking to overturn lower court rulings.
Dow Jones futures remain steady near 45,300 during European hours on Thursday, ahead of the opening of the United States (US) regular markets. Moreover, the S&P 500 futures edge higher 0.15% to trade above 6,450 the Nasdaq 100 futures advance 0.20%, trading around 23,500.
US stock futures show mixed performance, following a choppy Wall Street session. Traders adopt caution ahead of Thursday’s weekly Initial Jobless Claims, the ADP Employment Change, and the ISM Services Purchasing Managers Index (PMI), seeking fresh cues on the US Federal Reserve’s (Fed) policy outlook in September. Attention will shift toward Friday’s data, including US Nonfarm Payrolls expected to add about 75,000 jobs in August, while the Unemployment Rate is expected to be seen at 4.3%.
On Wednesday’s regular session, the Dow Jones eased 0.05%, while the S&P 500 rose 0.51% and the Nasdaq Composite advanced 1.02%. Tech stocks led gains after Alphabet, Google’s parent, escaped a breakup in an antitrust case. A US federal judge ruled that Google will not be required to sell its Chrome browser but must share data with competitors.
Market sentiment remains positive amid rising Federal Reserve (Fed) rate cut bets, driven by the weaker-than-expected July JOLTS Job Openings, which declined to 7.18 million from 7.35 million, marking the weakest level since September 2024 and missing forecasts of 7.4 million. The CME FedWatch tool indicates pricing in more than 99% of a 25-basis-point (bps) rate cut by the Fed at the September policy meeting, up from a 92% chance a day ago.
Traders may look for further developments on the legality of US President Donald Trump’s tariffs. The Trump administration asked the US Supreme Court to review the case of imposed tariffs, seeking to overturn lower court decisions that found most of his tariffs are illegal. Trump has placed tariffs on imports at the core of his trade policy, according to a report by CNBC.
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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