Dow Jones futures slump due to US-Greenland dispute, EU trade risks
Dow Jones futures fall by 1.25% to near 48,900 during the European session on Tuesday, while S&P 500 and Nasdaq 100 futures decline 1.34% and 1.56% to below 6,900 and 25,300, respectively.
  • Dow Jones futures decline as sentiment weakened amid rising uncertainty over the US–Greenland issue.
  • Europe could leverage roughly $10 trillion in US assets in an escalating trade dispute.
  • US indices stay under pressure as labor data delay expectations for further Fed rate cuts until June.

Dow Jones futures fall by 1.25% to near 48,900 during the European session on Tuesday, while S&P 500 and Nasdaq 100 futures decline 1.34% and 1.56% to below 6,900 and 25,300, respectively. US stock futures fell as market sentiment sours over rising uncertainty over the United States (US)–Greenland issue.

Europe holds roughly $10 trillion in US bonds and equities, including sizable public sector assets, which could be used as leverage in an escalating trade dispute, per Bloomberg. Meanwhile, shares of European automakers and luxury goods companies fell on Monday, while some defense stocks advanced.

US President Donald Trump threatened on Saturday that 10% tariff would be levied on goods from European Union (EU) members, effective February 1, until the US is permitted to purchase Greenland. Meanwhile, French President Emmanuel Macron reportedly urged the European Union to activate its “trade bazooka,” a measure that could restrict US access to EU markets or impose export controls, among other potential countermeasures.

US indices remain under pressure as domestic labor market data have pushed back expectations for further Federal Reserve (Fed) rate cuts until June. Fed officials have signaled little urgency to ease policy further until there is clearer evidence that inflation is sustainably moving toward the 2% target.

Traders await key US data due this week, including the PCE price indices, Q3 GDP, and S&P PMIs. Markets will also focus on Q4 earnings from companies such as Netflix, Charles Schwab, Johnson & Johnson, Intel, and Visa.

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.

يعتمد أكثر من مليون مستخدم على FXStreet للحصول على بيانات سوقية لحظية، وأدوات رسوم بيانية، ورؤى خبراء، وأخبار الفوركس. يساعد تقويمهم الاقتصادي الشامل والندوات التعليمية عبر الويب المتداولين على البقاء على اطلاع واتخاذ قرارات محسوبة. لدى FXStreet فريق يضم حوالي 60 محترفًا موزعين بين مقر برشلونة ومناطق عالمية مختلفة.
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أكاديمية التداول
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