Dow Jones futures fall due to US tariff concerns, US NFP eyed

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Dow Jones futures decline ahead of the US market opening on Friday, trading around 44,100, down by 0.46%, during European hours. Meanwhile, S&P 500 futures are down by 0.41% to near 6,350, and Nasdaq 100 futures decline 0.46% to trade near 23,250.

Dow Jones futures slide due to market caution ahead of the US Nonfarm Payrolls due on Friday.
US PCE report indicated that price pressures would increase in the second half of 2025 and delay Fed rate cuts.
Amazon declined around 7%, while Apple rose 2% during extended trading hours.

US stock index futures decline as traders adopt caution ahead of the United States (US) Nonfarm Payrolls (NFP), due later in the North American session. The US NFP is expected to remain in positive territory in July, which could strengthen the odds of delaying US Federal Reserve’s (Fed) interest rate cuts.

Additionally, this hawkish sentiment increased surrounding the Fed policy outlook following the recent US Personal Consumption Expenditure (PCE) Price Index report, suggesting that price pressures would increase in the second half of 2025. Core US Personal Consumption Expenditure Price Index (PCE) inflation ticked higher in June, rising 0.3% MoM as many market participants had expected. On an annualized basis, PCE inflation accelerated to 2.6% YoY, outrunning the expected hold at 2.5%.

Meanwhile, the market sentiment remains subdued as President Trump’s reciprocal tariffs are set to take effect later in the day, with the White House opting not to extend the deadline. Trump signed an executive order on Thursday, imposing tariffs ranging from 10% to 41%, set to go into effect on August 1, on US imports from dozens of countries and foreign locations, including Canada, India, and Taiwan. He also imposed a 39% tariff, one of the highest rates globally, on goods from Switzerland.

In futures markets, Amazon fell around 7% after issuing a weak revenue forecast for the third quarter, while Apple rose 2% on stronger-than-expected earnings and revenue. On Thursday, the regular market witnessed the Dow decline 0.74%, the S&P 500 slip 0.37%, and the Nasdaq edge down 0.03%. Advances in Microsoft and Meta failed to counter broader market weakness, weighed down by renewed trade tensions and ongoing economic uncertainty.

Dow Jones FAQs

What is the Dow Jones?

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.

What factors impact the Dow Jones Industrial Average?

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.

What is Dow Theory?

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.

How can I trade the DJIA?

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.