Dow Jones Forecast: DJIA rises despite more trade tariffs

US futures

Dow future 0.11% at 44537

S&P futures 0.57% at 6060

Nasdaq futures 0.80% at 21661

In Europe

FTSE 0.8% at 8766

Dax 0.09% at 21905

Trump announces 25% tariffs on steel & aluminium imports
US steel firms jump
Fed Chair Powell & US CPI in focus this week
Oil rises after 3 weeks of losses

Risk assets appear desensitised to trade tariff announcements

US stocks point to a higher open on Monday, recovering from last week's modest declines. Steelmakers were at the top of the leader board following President Trump's tariff announcements.

Trump has escalated trade tensions by introducing 25% tariffs on all imports of steel and aluminum into the US, on top of any existing duties on the metal. US steel jumped 5% in premarket trade, while other steelmakers, such as Cleveland Cliffs and Nucor, added 7.9% and 9%, respectively.

Trump added that he could announce further reciprocal tariffs on all countries later this week. However, the announcements didn't create the same volatility as last week's trade tariff announcements. After Trump rode back on Mexico and Canadian tariffs, the market may be considering tariffs as negotiating tools, which may not be as bad as initially feared.

While futures are higher and the USD is lower in a muted reaction to the tariffs, Gold has risen to a record high at $2900.

Looking ahead, a key focus will be on Federal Reserve chair Jerome Powell, who is due to testify before Congress on Tuesday and Wednesday. The US CPI data will be released on Wednesday before Powell's testimony.

The market expects the Fed to keep rates on hold in March after a solid US employment report and unemployment falling to 4%.

A solid jobs market and a lack of clarity over Trump's policies will likely keep the Fed on hold until later in the year.

Corporate news

McDonald's is set to open 2% higher after the fast food giant’s comparable sales beat estimates in Q4. Strength in the Middle East and Japan boosted McDonald's international licenced markets business.

BP ADR rose over 6% following reports that activist investor Elliott Investment Management has acquired a stake in the oil major, which is pushing for change.

Dow Jones forecast – technical analysis.

After running into resistance at 45k, the Dow Jones eased lower and remains in a holding pattern, topped by 45k on the upside and 44k on the downside. Buyers supported by the long lower wicks on the candles will be encouraged towards 45k and a rise to fresh all-time highs. Sellers will look to break below 44k to create a lower low and test the 50 SMA at 43.7k

FX markets – USD falls, GBP/USD falls

USD is edging lower, extending losses from last week amid a weak reaction to tariff news. Attention will be focused on Fed Chair Powell’s testimonies on Tuesday and Wednesday and CPI data.

EUR/USD is falling, extending losses from last week as trade concerns linger ahead of a speech by ECB President Christine Lagarde. Sentix investor confidence improved to -12.7 in February, up from -17.7. However, this has done little to support the EUR amid worries that Trump will follow through on his threats and apply tariffs to the EU.

GBP/USD is heading lower, below 1.24, after modest gains last week. Attention is on BoE speeches this week, including from hawk-turned-dove Catherine Mann, who voted to reduce rates by 50bps in the meeting last week despite hawkish votes previously.

Oil rises after 3-weeks of declines.

Oil prices are recovering after three weeks of losses as dip buyers enter the market.

Oil prices have fallen in recent weeks amid concerns over trade tariffs slowing the global economy and hurting the demand outlook.

Today's announcement of more tariffs has been shrugged off by the oil markets, at least for now.

Separately, Trump said over the weekend that the US is making progress with Russia to end the Ukraine war; however, the lack of details means the impact on the oil market is minor.

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