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Dow Jones Spikes As Earnings Sentiment Triggers Bullish Demand

The Dow Jones Index rose added 263.71 points on Tuesday to rise by 0.69% to register the fourth consecutive session of gain. The earnings season is here and this is likely to provide stocks with an opportunity to rally amid ongoing concerns that investors’ continued profit taking is likely to lead to a slump in the coming weeks.

Goldman Sachs, Microsoft, American Express, Caterpilar, Salesforce, Apple and Walt Disney all ended the day on a positive note on Tuesday. However, the index’s largest stock by weight, United Health Group, closed trading down by 1.75%.

Notably, the positive momentum was not dampened by weaker-than-expected US manufacturing data released on Tuesday. The preliminary reading for the S&P Global US Manufacturing PMI fell by 0.8 percentage point to 50.9, missing the forecast figure of 52.0. However, the housing industry provided some reprieve for the index. New Home Sales figures rose to 693,000 in March from February’s 637,000, outpacing the forecast 668,000. That was a significant improvement, considering that it was the first time that new home sales figures had risen in 2024.

Looking ahead, investors will likely position themselves for a potential market rally as earnings reports come out in the next week.  Visa earnings for the fiscal second quarter beat expectations, sending the stock up by more than 2% in the hours that followed. The payments giant reported $8.78 in net revenues, beating analysts’ forecast $8.62 billion. This let to $2.51 in earnings per share, exceeding the forecast estimate $2.44. Microsoft is the next key DJI stock with its earnings release in the barrel, and set for release on Thursday.

Technical analysis

DJI is on an upward trajectory, as shown in the 30-minute timeframe. The uptrend will continue as long as action remains above 38,327.60, with the first resistance coming at 38,568.77. However, if the bulls continue controlling the market at that mark, the DJI will break above the resistance and test 38,776.28. On the other hand, a move below 38,327.60 will signal control by the sellers, with the support at 38168.95 likely to break. If that happens, it will invalidate the upward narrative and potentially push the index lower to test 38,013.53.