Dow Jones Forecast: DJIA steadies after a solid Trump-inspired rally

US futures

Dow future -0.08% at 44504

S&P futures -0.08% at 6120

Nasdaq futures -0.5% at 21878

In Europe

FTSE -0.56% at 8522

Dax -0.06% at 21411

Trump appears to adopt a softer position on China
Trump has boosted the markets this week
US PMI data is due shortly
Oil is set for a weekly loss owing to Trump’s policy calls

Trump adopts a softer stance towards China

U.S. stocks point to a modestly lower start after the S&P 500 scored its first record high of 2025 yesterday at 6118.

The S&P 500 is now up 4% this year, while the Dow Jones has rallied 4.75% in 2025. The Nasdaq has booked gains of 3.85%.

The latest leg higher in stocks came after President Trump appeared to soften his approach towards tariffs on China. Trump said he would rather not use tariffs, suggesting that there was still room for negotiation between the world's two largest economies.

Whilst it's still early days, Trump hasn't done anything to provoke a sell-off in the stock market. Quite the opposite, stocks have been cheering Trump’s less hostile position and demands for lower interest rates.

Attention now turns to US PMI data, which is expected to show that the world's largest economy continued to see solid service sector activity at 56.5 in January, down marginally from 56.8 in December. Manufacturing is expected to contract at a slower pace of 49.6, up from 49.4.

Corporate news

Boeing is 1% lower after the aircraft manufacturer said it will post a larger-than-expected loss of around $4 billion in its most recent quarter. The company faced prolonged strikes and charges relating to a U.S. government project.

American Express fell 0.3% despite posting a 12% jump in Q4 profit. More consumers spent on the card during the holiday season for travel and online shopping.

Novo Nordisk is up over 13% after the drug giant reported that trials of its experimental medicine amycretin showed patients dropped 22% of their body weight.

Cryptocurrency stocks will be in focus as Trump has ordered the creation of a working group tasked with devising new rules for the crypto industry and potentially creating a national stockpile of digital tokens.

Dow Jones forecast – technical analysis.

The Dow Jones has extended its recovery from the 44,740 January low, rising above the 50 & 100 SMAs to its current level of 44500. The RSI supports more upside while it remains out of overbought territory. Bulls will look to extend gains to 45000 and fresh record highs. Support is at 44k round number and 43,600 the 50 SMA.

FX markets – USD falls, EUR/USD rises

USD is falling on Friday as the market digests President Trump's surprise comments the previous day, which cast doubts on the application of tariffs on China. Trump also called for the Federal Reserve to cut interest rates. The USD trades at a monthly low after Trump’s return as President has seen less inflationary measures than feared.

EUR/USD is rising towards 105, a multi-week high, after upbeat PMI data from Germany and the eurozone. The data showed an improvement in the region's business activity in January, and the composite PMI returned to expansionary territory.

USD/JPY is falling after the BoJ hiked interest rates by 25 basis points to 0.5%, in line with forecasts and a 17-year high. The central bank also adopted a slightly hawkish tone, suggesting that more rate hikes could come if the economy performs as expected. Inflation data yesterday showed that core CPI rose to 3% in December.

Oil steadies, awaiting more clues

Oil prices are falling for a sixth straight session and are on track to drop 4% across the week, marking the deepest weekly decline since late November.

Oil has been under pressure this week due to Trump's policy measures, which include sweeping plans to boost US oil production and demands that OPEC lower prices.

Trump told the World Economic Forum on Thursday that he wants OPEC and Saudi Arabia to lower crude prices.

Still a possible announcement surrounding tariffs for Iran, Venezuela, and Russia could come in the coming weeks, which may support oil prices.

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