The Dow Jones Industrial Average has surged by 1.05% and has generally outperformed both the NASDAQ and the S&P 500. The Dow Jones over the past month has declined by 5.52%, whereas the S&P 500 has declined by 7.18% and the NASDAQ by 8.05%.
The US market was closed yesterday and is yet to open today. However, the market has been following the outside-hours price movement. On both days, the Dow Jones Futures have declined, and this week’s price action is currently down by 0.96%. The market has been influenced by various factors such as the monetary policy and the approaching Quarterly Earnings.
One of the reasons which the index has been pressured is reports from companies that have already been released. For example, microchip manufacturer Micron Technology (NASDAQ: MU) reported a 150% increase in net income for the current quarter, its revenue was $8.64B. Earnings per share rose to $2.59 from $2.14 a quarter earlier, but the corporation does not expect the same strong results in the next reporting period.
This is not unique to Micron Technology but is predicted by most companies. According to Bloomberg, most companies report a poor quarter or predict the next quarter to be poor. This is also partially due to inflation, which has affected consumers’ disposable income. In addition, the higher interest rates are likely to make borrowed capital more expensive and even slower economic demand.
Another negative factor is the situation in the domestic bond market: according to yesterday's trading data, the yield of the leading securities began to rise again. So, at the end of last week, the rate on United States 10-Year Treasuries rose to 2.952% from 2.889%, while the US 20-Year bond increased to 3.4332% from 3.3671% a few days earlier.
On the other hand, we also have some potentially positive market factors that traders will monitor over the coming days. The President has confirmed that his government is debating whether to potentially tackle tariffs put in place on China by the previous government. The move is aimed at lowering inflation but can also give companies more freedom. If the government proceeds, the move may support the stock market.
Currently, the components showing the highest price growth are McDonald’s (NYSE:MCD) increasing by 2.46%, Coca-Cola (NYSE: KO) by 2.34%, and Boeing (NYSE: BA) by 2.28%. Among the companies showing the strongest active decline is Intel (NASDAQ:INTC) 2.86%, Nike (NYSE:NKE) by 1.00%, and 3M Company (NYSE:MMM) by 0.71%.
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