Morning Brief: Dow Jones, S&P 500 Rises on Amy Coney Barrett Nomination

US futures are rising today as the market reacts to the nomination of Judge Amy Coney Barret to the Supreme Court and the overall weak US dollar. Futures tied to the Dow Jones, S&P 500, and Nasdaq 100 have jumped by 0.70%, 0.62%, and 0.57%. At the same time, the dollar index (DXY) has dropped by about 0.13%.

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Over the weekend, Donald Trump nominated Judge Amy Barret as the next justice of the highest court in the United States. The decision was welcomed by Republicans who expect to push through her nomination by election date. Democrats have rejected her nomination. The implication for her nomination is that Republicans will have control of the court, which could favour companies.

The Dow Jones is also rising even as tensions between the United States and China continued. While a US judge temporarily halted Trump’s decision to ban TikTok, the country escalated its restrictions by targeting the biggest Chinese chip company. On Friday, the US administration said that it would limit the supply of critical parts to Semiconductor Manufacturing International Corp (SMIC). This measure risks more retaliation by China, which has been creating an entity list targeting US firms.

The Dow Jones and other indices are also rising because of the overall weaker dollar. The dollar index (DXY), which measures the strength of the greenback has fallen by 0.13%. That is because the dollar has slumped against key peers, including the euro, pound, and even safe-havens like Japanese yen and Swiss franc.

In addition, US stocks are rising because of recent polls showing that Joe Biden has a leading margin against Donald Trump in key battleground states. Investors believe that Biden will have a calm effect to the market and possibly improve relationships with China and Europe.

In Asia, stocks are in the green, with the Hang Seng, Shanghai composite and Nikkei 225 gaining by 0.75%, 0.10%, and 1.20%.

Meanwhile, in Europe, futures are in the green also. Futures tied to the DAX index, FTSE 100, and CAC 40 have risen by 0.56%, 0.45%, and 1.38%, respectively.

Dow Jones technical analysis

The daily chart shows that Dow Jones futures have risen for the past three consecutive days. This has seen them rise from a low of $26,490 on September 24 to the current $27,380. On the daily chart, the index is attempting to move above the 25-day and 50-day exponential moving averages. The price is also slightly below the ascending black trendline that connects the lowest levels in June, July, and August.

Therefore, the index is likely to continue rising as bulls aim for the next resistance level at ~$28,000. On the flip side, a move below last week’s low of $26,537 will invalidate this trend.

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Dow Jones technical chart

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