- Summary:
- The Dow Jones Index is not spooked by news of upcoming tariffs by the US against the EU, China, Mexico and Canada. How could it play out?
The Dow Jones index (INDEXDJX: .DJI) rose in the early hours of trading in the New York session, with traders’ sentiment boosted by news of a favorable tariff environment. The index was at 44,175 points, up by 0.3% on the daily chart to bring its year-to-date gains to 3.5%. US President Donald Trump announced his intention to impose tariffs on imports from the EU and China starting in February, but the measures are seen as relatively less aggressive.
Trump said on Tuesday that 10% tariff on Chinese imports will come in February. He had stated earlier that a 25% tariff on imports from Mexico and Canada could take effect next month, the two countries of complacency in allowing the entry of illegal immigrants and fentanyl from China.
EU could find itself on the receiving end, too, as Trump seeks to address the gap in trade balance between the US and the Eurozone. Stock markets will likely be defined by trade tariff sentiment in the near-term, with investors waiting for responses by the EU, China, Mexico and Canada.
Nvidia (+3.9%), Travellers Companies (+5.4%) and Microsoft (+2.7%) and Procter and Gamble (+2.3%) were the biggest gainers in the Dow Jones Index and the time of writing. The index’s top two stocks by weight, Goldman Sachs and UnitedHealth, were down by -0.3% and -0.5%, respectively.
Dow Jones Index Prediction
The Dow Jones Index pivots at 43,984 and the momentum signals the likely continuation of the upside. Immediate resistance will likely be at 44,250 points, but an extended control by buyers could clear that hurdle and potentially test 44,495 points.
Alternatively, the downside will prevail if the index breaks below 44,984 points. With the sellers in control, the first support is likely to be at 43,733 points. Also, breaking below that level will invalidate the upside thesis. Furthermore, that momentum could extend the decline to test the second support at 43,600 points.
