Dow Jones Industrial Average shrugs off new tariff threats

• The Dow Jones rose around 400 points at its peak on Thursday.
• Despite further tariff changes from President Trump, equities are looking up.
• Investors have become inoculated to tariff threats, but volatility pressures remain.

The Dow Jones Industrial Average (DJIA) knocked around 400 points higher at its highest on Thursday, driven by a heavy bounceback in overweight stocks listed on the Dow Jones. United States (US) President Donald Trump refreshed his threats of imposing a 25% tariff package on Canada and Mexico, but investors have gotten a lot of practice assuming the Trump administration will find a last-minute reason to pivot away from its own arbitrary schedules.

President Trump reversed his own timeline for new tariffs in the early hours of Thursday's US market session, pivoting from an April 2 start date for 25% tariffs on Canada and Mexico, as well as an additional 10% import fee on Chinese goods, to now begin on March 4. "Reciprocal tariffs" that will be imposed on a much wider swath of US trading partners are still slated for implementation on April 2, though specific details still remain elusive on both sets of tariffs.

Despite continued wavering from the Trump administration and cyclical headline churn on tariffs, investors continue to bet that a last-minute deal or delay will be found on the latest round of import taxes being threatened by President Trump.

US President Donald Trump reiterates March 4 tariffs, still seeking Ukraine deal

On the economic data front, US Gross Domestic Product (GDP) growth for the fourth quarter beat forecasts on the front end of the curve, while Durable Goods spending accelerated faster than expected in January. US Q4 GDP rose to 2.4% QoQ compared to the expected hold at 2.2%, but the annualized figure held steady at 2.3%.

US Durable Goods Orders accelerated to 3.1% MoM in January, beating the expected print of 2.0% and swinging well above the revised previous figure of -1.8%. A welcome print for economy watchers, it doesn't come without its drawbacks: much of the figure is likely businesses stuffing their inventories ahead of potential tariffs, and a recent uptick in inflation may be boosting the numbers artificially, which could pose a larger problem down the line. 

It's worth noting that much of the uptick in Durable Goods Orders can be found in the transportation sector following a large swell in bookings for Boeing (BA) airplanes and automotive vehicles. Without these factors, US Durable Goods Orders actually came in at a flat 0.0% in January, missing the forecast of 0.3% and coming in below the revised previous print of 0.1%.

US Personal Consumption Expenditure Price Index (PCEPI) inflation is due on Friday, but Thursday's preview release bodes poorly for investors pinning their hopes that a recent uptick in headline inflation figures will be temporary. QoQ Core PCE, a preview of Friday's main inflation print, accelerated to 2,7% from the expected hold at 2.5%.

Dow Jones news

Over two-thirds of the Dow Jones equity board is drifting into the high side on Thursday, but outsized gains in key overweight securities are dragging the average higher on the day. 3M (MMM) is up 3% on Thursday, climbing above $151 per share. UnitedHealth (UNH) added 1.65%, climbing above $471 per share and adding 8 points. UNH is the second-highest-weighted stock listed on the Dow Jones, and a few points added or removed from the share price has a pronounced impact on the Dow's headline.

Dow Jones price forecast

A near-term consolidation pattern continues to cook into the Dow Jones chart, with price action hobbled just south of the 50-day Exponential Moving Average (EMA) near 43,885. Technical traders will be looking for an opportunity to step back into a bullish rebound with technical oscillators rolling over in oversold territory, but it won't take much for a downside plunge to drag bids closer to the 200-day EMA parked near the 42,000 major price handle.

Dow Jones daily chart