Dow Jones bounces up amid strong US data and hawkish Fed comments

• Dow Jones index advances on more favorable risk environment.
• US equity markets remain positive despite strong macroeconomic data, hawkish comments from Fed's Williams. 
• Broader Dow Jones trend remains negative, on corrective reversal from March highs.

The Dow Jones Industrial Average (DJIA) is finally posting gains in January as investors digest the strong US economic outlook and pare back their interest rate cut hopes.

US jobless claims and manufacturing activity figures have endorsed the view of strong economic momentum and a tight labour market. Beyond that, New York Federal Reserve (Fed) President John Williams has echoed the words from Chair Jerome Powell by stating that there is no rush to cut rates.

All the main Wall Street indices are trading higher.  The Dow Jones, advances 0.6% to 37,979, while the S&P 500 gains 0.44% to 5,043. The NASDAQ lags with a 0.4% gain to 15,743.

Dow Jones news

Most of the sectors are trading in the green on Thursday with Communication Services leading with a 1% advance, followed by Financials, up 0.9%, and Industrials, 0.6% above its opening level. At the bottom, Utilities and Energy are practically flat.

United Health (UNH) rose 3.1% to $493.51 and is the best performer for the second day in a row, fuelled by the strong quarterly earnings results. Next is Travelers Companies  (TRV) with a 1.6% gain to $209.79. Salesforce is leading losses with a 1.1% decline to $273.23, followed by Intel (INTC), down 0.4% to $35.53.

Dow Jones technical outlook

The DJIA is trimming some of last week's losses, although the overall picture remains bearish. The move below 38,560 has activated a Head & Shoulders pattern that points toward a sharper decline.

Immediate support is 37,586, followed by the measured target of the H&S pattern, which meets the mid-January low and 38.6% Fibonacci retracement at 37,087. A bullish reaction might find resistance at the 38,531 previous support ahead of the 39,000 region (order block).

Dow Jones 4-Hour Chart