Dow Jones futures held steady around 47,700 during European trading on Tuesday, while S&P 500 and Nasdaq 100 futures hovered near 6,900 and 25,950, respectively. Despite Wall Street’s rally to record highs on Monday, market participants appeared cautious ahead of key corporate earnings and the Federal Reserve’s policy decision later this week.
Investor sentiment remains upbeat on hopes of a US-China trade breakthrough and another Fed rate cut, which helped the Dow Jones Industrial Average rise 0.71% on Monday. The S&P 500 and Nasdaq 100 gained 1.23% and 1.83%, respectively, marking fresh milestones for all three major indices.
Market focus is now turning to Big Tech earnings, with Apple, Amazon, Alphabet, Meta, and Microsoft all set to report this week. According to CNBC, Amazon will begin its largest-ever round of layoffs on Tuesday, in what could impact thousands of jobs.
US-China Trade Progress and Fed Outlook Support Risk Appetite
Over the weekend, senior officials from the US and China announced in Malaysia that they had reached a framework agreement on tariffs and key trade issues, including rare earth exports, soybean purchases, and TikTok’s operations. The deal is expected to be finalized by Presidents Donald Trump and Xi Jinping during their upcoming meeting in South Korea.
Meanwhile, markets are fully pricing in another 25 basis point Fed rate cut at the October meeting, which would bring the benchmark rate to 3.75%–4.00%, according to the CME FedWatch Tool. Traders also see a 95% probability of an additional rate cut in December, as the Fed continues efforts to support growth amid moderating inflation.
About the Dow Jones Industrial Average
The Dow Jones Industrial Average (DJIA) is one of the world’s oldest and most closely followed stock indices, comprising 30 major US companies. It is price-weighted, meaning higher-priced stocks exert greater influence on the index.
The index is shaped by corporate earnings, macroeconomic data, and Federal Reserve policy, all of which impact investor sentiment and credit conditions. The Dow Theory, developed by Charles Dow, emphasizes trend confirmation between the DJIA and Dow Jones Transportation Average (DJTA) to identify broader market direction.
Traders can gain exposure to the DJIA through ETFs, such as the SPDR Dow Jones Industrial Average ETF (DIA), or through futures and options contracts that allow speculation on the index’s future value.
