Dow Jones Forecast: DJIA set for strong weekly gains ahead of Trump's inauguration

US futures

Dow future 0.69% at 43450

S&P futures 0.91% at 5992

Nasdaq futures 1.84% at 21476

In Europe

FTSE 1.52% at 8516

Dax 1.28% at 20888

US treasury yields dip & USD fell, lifting sentiment
US earnings season has booted the mood
GBP/USD falls further after weak retail sales
Oil rises for a 4^th straight week

US stocks post strongest weekly rise since November

U.S. stocks are heading higher on Friday with the S&P 500 and the Dow Jones set to book the strongest weekly advances since November, and as investors wait for further clues regarding Tump’s policies next week.

Stronger-than-expected earnings from major banks as they kicked off earnings season and signs that underlying inflation is cooling have boosted risk sentiment this week, helping the S&P 500 and the Dow Jones log steep weekly rises.

U.S. Treasury yields have dipped this week, with the benchmark 10-year note now at a weekly low of 4.58%. However, the market will likely be on edge at the start of next week when Trump takes over the White House on Monday. In his inauguration speech, he could provide further insights into his plans on tax cuts, trade tariffs, and looser regulation.

Trump's policies are expected to be inflationary and could spark a trade war, impacting global markets. However, some concerns regarding Trump’s policies have been priced in.

Heading towards the end of January, the Federal Reserve will meet again and is not expected to cut interest rates. The market sees the first rate cut from the Fed potentially coming in June.

Corporate news

Apple is set to open almost 1% higher, recovering from yesterday's losses when it suffered its last day since August. Apple sold off yesterday on news that it was dethroned as China's biggest smart for sale phone seller in 2024 as local rivals Vivo and Huawei overtook the iPhone maker.

Microsoft is set to rise modestly after the software giant announced that it is adding AI tools to its consumer Microsoft 365 bundle, lifting the price in the US for the first time since introducing subscription over a decade ago.

Rivian is set to pen almost 3% higher after reports that German automobile giant Volkswagen is considering ways to deepen its partnership with the US EV maker.

Dow Jones forecast – technical analysis.

The Dow Jones has recovered from the 41,750 January low, rising above the 100 SMA and 43,400 resistance, the late December high. A rise above here create a higher high and put the bulls back in control. The 50 SMA at 43,580 comes into focus ahead of 44k. Immediate support is at 42,750 the 100 SMA; below that, support can be seen at 42,250, ahead of the 41,750 support zone. A break below here creates a lower low, and bears could gain momentum.

FX markets – USD steady, GBP/USD falls

The USD is holding steady at the end of the week as attention turns to Trump’s inauguration. However, the greenback is still on track to end the week at a low, snapping a six-week winning run. The dollar has surged in recent weeks on the back of rising treasury yields, reflecting expectations of inflationary policies from Trump. Treasury yields eased this weak after softer US inflation data.

EUR/USD is holding steady around the 1.03 level with ECB- Fed rate divergence priced in. Data today confirmed Eurozone inflation remained at 2.4% YoY in December, in line with expectations. Core inflation remained at 2.7%. The ECB is still set to cut rates at the end of the month. Yesterday, the ECB December meeting minutes showed policymakers saw inflation reaching the 2% tater level sooner than expected.

GBP/USD is falling after UK retail sales were weaker than expected. They fell 0.3% month on month in December, down from 0.1% growth in December and below the 0.4% rise forecast. The data adds to the glum figures received across the week, which showed the UK economy group by a weak than expected 0.1% in November. The glum economic data has been coming in since Labour announced the biggest tax rises since 1993 in her October budget.

Oil rises for a 4th straight week

Oil prices are holding steady below $78 after yesterday's losses, but are still on track to book gains of 2.7% across the week, marking the fourth straight weekly increase.

Oil has been boosted across the week as investors assessed the impact of U.S. sanctions, which have heightened expectations of oil supply disruptions.

Supply concerns, renewed hopes of US interest rate cuts, and crude stockpile draw have helped support oil prices.

Meanwhile, data from China was also encouraging. The world's top oil importer fulfilled its government's ambitions of 5% growth for the year. China posted Q4 GDP of 5.4% its strongest reading since Q2 of 2023.

StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Please ensure you fully understand the risks involved by reading our full risk warning.

FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.

StoneX Europe Limited is registered with the German Federal Financial Supervisory Authority (BaFin). BaFin registration ID: 10160255

FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.

The statistical data and the awards received refer to the Global FOREX.com brand.

This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.

Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.

Additionally, StoneX Europe Ltd is allowed to provide Investment and Ancillary Services to the following non-EU jurisdiction: Switzerland.

StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.

Tied Agent Information: KQ Markets Europe Ltd with Company No. HE427857.
Address: Athalassas 62, Mezzanine, Strovolos, Nicosia Cyprus.
Services Provided: Reception and Transmission of Orders.
Commencement Date: 06/12/2022
Website: KQ Markets - CFD Trading | KQ Markets

We may pay inducements, such as commissions or fees, to affiliates or third-party introducers for referring clients to us. This is in line with regulatory guidelines and fully disclosed where applicable.

StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.