Dow Jones futures steady as traders await US Q3 GDP release
- Dow Jones futures move little as traders adopt caution ahead of the US GDP Annualized for Q3 release.
- US Index futures were little changed ahead of a shortened holiday week, with early Wednesday close and Thursday holiday.
- Wall Street rose on Monday, led by tech gains; Nvidia climbed 1.5%, and Oracle advanced 3.2%.
Dow Jones futures inch lower 0.06% to trade near 48,650 during Tuesday’s European session, while S&P 500 and Nasdaq 100 futures also decline, edging lower 0.09% and 0.12% to roughly 6,920 and 25,650, respectively.
Traders await the US Gross Domestic Product (GDP) Annualized for the third quarter due later in the North American session, which is expected to come at 3.2% for Q3, slowing down from the 3.8% growth in Q2. Moreover, the US ADP Employment Change 4-week average and Q3 Core Personal Consumption Expenditures (PCE) will also be eyed.
US Index futures were little changed after Wall Street’s strong, tech-led start ahead of a shortened holiday week. US markets will close early on Wednesday for Christmas Eve and remain shut on Thursday for Christmas Day.
In Monday’s US regular session, the Dow Jones rose 0.47%, the S&P 500 gained 0.64%, and the Nasdaq 100 climbed 0.52%. Nvidia advanced 1.5% on reports it plans to ship H200 AI chips to China by mid-February, while Oracle rose 3.2% and Micron Technology added 4%. Energy stocks also gained, with Exxon Mobil and Chevron rising 1.3% and 1.4%, respectively, as Oil prices firmed on renewed supply concerns linked to US actions involving Venezuela.
Market sentiment could improve amid growing odds of the Federal Reserve (Fed) continuing its easing policy. Fed Member of the Board of Governors Stephen Miran said in an interview on Bloomberg TV on Monday that the last few months have seen data consistent with his view of the world and that he doesn’t see a recession in the near term. Miran added that failing to ease policy would raise recession risks.
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.
Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.
Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow’s theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.
There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.