U.S. Futures Rise: What’s Next?
The Dow Jones from an Economic Perspective
U.S. futures for the Dow Jones Industrial Average rose 0.3%. Changes in futures are not an accurate indicator of market movements after the market opens.
Tensions Between the U.S. and Iran
Continue Futures are reacting positively after Axios reported that the U.S. and Iran agreed to halt mutual attacks following a weekend of clashes.
No other media outlets have independently confirmed the Axios report so far.
According to a Pakistani official, talks have been temporarily suspended, but a Trump administration official denied the report, confirming that they are proceeding according to plan to implement the memorandum of understanding signed in the coming days.
While U.S.-Iran negotiations remain a key focus, here are some other events that could impact Wall Street over the coming week:
First, this will be a short week, as markets will be closed on Friday, July 3, for Independence Day.
Second, since Friday is a public holiday, the key U.S. jobs report—the nonfarm payrolls data—will be released on Thursday, July 2. In addition to the jobs report, initial jobless claims for the week and factory orders data will also be released on Thursday.
Finally, all eyes will be on the new Federal Reserve Chair, Kevin Warsh, in his first public appearance following the Fed’s latest policy decision, during the European Central Bank’s annual symposium in Portugal.
The Dow Jones from a Technical Perspective
Last Thursday, the Dow Jones rebounded from historic highs around 52,675, forming a bearish pin bar on the daily chart. This was driven by a negative divergence on the MACD indicator on the daily timeframe.
The Dow Jones is currently trading around 52,040 points and is now attempting to pull back to find support at the uptrend levels, which represent the lower boundary of the ascending wedge.
We are targeting 51,000 as an initial target, and if the uptrend levels are broken, we expect the index to reach 50,500. This scenario will fail if the index breaks above 52,700.
