Dow Jones soars toward 40,000 on Fed rate cut bets, China's optimism

• DJIA gains 0.62% as traders price in June Fed rate cut chances.
• Trump's softened tone on China trade spurs risk-on rally near 40,000.
• Gold climbs above $3,300 as yields slump despite stronger US data.

The Dow Jones Industrial Average (DJIA) registered gains of over 0.62% as investors became optimistic that the Federal Reserve (Fed) could cut interest rates at its June meeting amid growing concerns of a recession in the United States (US). This, along with an improvement in risk appetite due to the US willingness to strike a deal with China, drove the DJIA near the 40,000 mark after bouncing off daily lows of 39,200.

Fed pivot hopes and hints of US-China trade thaw lift Wall Street, though resistance looms near record highs

On Wednesday, US President Donald Trump adopted a moderate stance on China toward trade talks in Beijing and even talked about reducing levies on its products, a sign of openness towards reaching a deal. Nevertheless, US Treasury Secretary Scott Bessent said, "No unilateral offer from Trump to cut China tariffs."

During the overnight session for North American traders, Chinese Ministry of Commerce spokesperson He Yadong said there were no trade talks with the US and called for the cancellation of "unilateral" tariffs.

US economic data lifted the market mood as the jobs market witnessed a report aligned with forecasts, while Durable Goods Orders jumped sharply in March, sponsored by airplane orders.

An improvement in market mood failed to weigh on Gold prices, with the precious metal back above $3,300, up 1%, underpinned by failing US Treasury yields as the 10-year T-note coupon plunges seven and a half basis points to 4.309%.

Dow Jones price forecast

Dow's downtrend remains in place, but buyers are gathering some steam. Recently, US President Donald Trump said they held talks with China in mourning, sparking a jump in the DJIA, which hit a daily high at 40,002.

If buyers push the Dow past 40,500, this could pave the way to challenging last week's peak at 40,790. Key resistance lies ahead at 41,000. Conversely, if sellers drive the index below April 23's low of 39,486, look for a test of April 22's high of 39,271 to close the gap up witnessed between April 22 and 23.