- The Dow Jones Index rose by 740 points on Tuesday, and market volatility is likely to rise with Nvidia's earnings in the pipeline.
The Dow Jones Index (INDEXDJX: .DJI)climbed 740 points on Tuesday with traders upbeat following the European Union’s agreement to fast-track it trade negotiations with the United States. Those gains drove the Index to reclaim the 200-day EMA support- underlining the likelihood of an extended uptrend in the coming days. In addition, the Index is back above the psychological 42,000 points mark, adding weight to the bullish perspective.
Meanwhile, Consumer Confidence rose in May, hitting 98, up from April’s 85.7 and beyond analysts’ forecast figure of 87.1. That signals that trade tariff fears have calmed down, which could see more aggressive bets in equities markets. Furthermore, traders have become increasingly familiar with President Trump’s pattern of walking back on his elevated tariff rates, which has boosted investor confidence.
Looking ahead, AI Chip giant, Nvidia (NASDAQ: NVDA) will release its quarterly earnings on Wednesday. The company has established itself as a barometer for the broader tech market and is also a constituent component of the Dow Jones Index. Market analysts estimate that the company will report revenues of $43.28 billion for the quarter ended April 30, up from $26 billion for the corresponding period a year ago.
In addition, focus will be on its sales figures in China, as well as news on its planned commencement of low-cost chips sales in that country. The company previously reported that it expected to take $5.5 billion hit following US Government export restrictions.
Dow Jones Index Prediction
Dow Jones Index momentum calls for further upside above the pivot mark at 42,180 points. The upward movement will likely meet initial resistance at 42,280 points mark. However, a stronger momentum will clear that barrier and likely push the Index to test the second resistance at 42,340 points.
On the other hand, the momentum will likely shift to the downside if the Index breaks below 42,180. That will likely see the first support established at 42,110 points. The upside narrative will be invalid if the index breaks below that level. Also, an extended control by the sellers will send the action lower and potentially test 41,820.
AAPL Reclaims $200 Support. Will it Hold?
Apple (NASDAQ: AAPL) plans to expand production in India as a way of diffusing the geopolitical pressures in China, but that has failed to bear fruit so far, with Trump pushing for relocation for manufacturing to the United States. On a positive note, Apple stock price snapped an eight-session losing streak and reclaimed the $200 support on Tuesday. In addition it is up by 0.3% in Wednesday's premarket session.
Nonetheless, it sits in a delicate position, with the resulting sentiment impacting the broader Dow Jones Index.
Apple Draws Down the Dow
However, the Dow Jones Index upside will be limited by the underlying bearishness related to Apple stock price. The company is staring at a rising prospect of fending off downward pressure in its largest market after US President Donald Trump threatened 25% tariffs on iPhones manufactured outside the United States.