Dow Jones Industrial Average recovers after tariff rout

• The Dow Jones has gained over 660 points during the US session.
• Despite the gains, the Dow is still off of last week's highs above 45,000.
• A temporary waive of tariffs on Mexico bolstered sentiment, but now EU tariffs loom.

The Dow Jones Industrial Average (DJIA) is caught in a lurch on Monday, falling below the 44,000 handle in the overnight session before recovering lost ground after headlines hit that US tariffs on Mexico may be delayed for up to a month as the two countries work out their differences. However, fresh threats of new tariffs on Europe further complicate investor sentiment to kick off the trading week.

United States (US) Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic noted that he and the rest of the Federal Open Market Committee (FOMC) are willing to hold off even longer on interest rate adjustments. Tariffs are spiraling into a global trade war between the US and the majority of its trading allies, weighing heavily on stability and the inflation outlook.

Mexico potentially scored a one-month delay on US tariffs, but details remain fuzzy and are dependent on how negotiations between the two sides evolve. Canada, China, and now the European Union remain on the block as countries that President Trump will punish by charging his own constituents excess fees for buying their goods.

The US ISM Purchasing Managers Index (PMI) recovered in January, climbing to 50.9 from 49.3, its highest point since late 2022. However, US economic signals are taking a hard backseat to geopolitical turmoil and trade war headlines. This is likely the last time that PMIs will have steady bullish prints for a while as the US trade taxes it is imposing on itself take hold and squeeze economic activity.

Dow Jones news

Despite a steep trim of the Dow Jones Industrial Average over the weekend, the major equity board is holding surprisingly steady in the aggregate, with about half of the index holding in the green for Monday. Apple (AAPL) and Nvidia (NVDA) are the biggest losers on the Dow, falling 3.4% and 2.8% respectively. Apple backslid to $228 per share, with Nvidia falling to a share price of $117. Both megacompanies are hugely exposed to trade tariffs, with the technology sector relying heavily on cross-border trade in order to manufacture and assemble their products.

Dow Jones price forecast

The Dow Jones Industrial Average is scrambling to dig in its heels at the 44,500 level, caught in whipsaw chop as equities go reeling. The Dow kicked off the trading week below the 44,000 handle, but investor sentiment is catching some bids on easing tariff headlines, keeping price action overall on the bullish side, though the Dow Jones remains caught on the low side of all-time highs above 45,000.

Dow Jones daily chart