Dow Jones Industrial Average trims lower during holiday-thinned session

• The Dow Jones shed weight on a quiet Thursday, declining on thin holiday volumes.
• The Juneteenth holiday has turned Thursday into an extended overnight session.
• The Trump administration is debating stepping directly into the Israel-Iran conflict.

The Dow Jones Industrial Average (DJIA) fell through an extended overnight session, with American markets shuttered for the Juneteenth holiday. However, off-market bids are still leaking through, and investors are facing growing trepidation about the Trump administration dragging American assets directly into a Middle East combat scenario.

According to a CBS reporter posting on the X (nee Twitter) social media platform, President Donald Trump may be considering an order for American military assets to target an Iranian nuclear production facility. If the Trump administration decides to go ahead with the reported proposal, it will be the first time the US has deployed military assets in a pre-emptive manner since the 2003 invasion of Iraq. Citing an Israeli government official, The Times of Israel reported that the Israeli government expects a final decision from the Trump administration within the next 24 to 48 hours.

Reports citing three separate diplomats have confirmed that personnel within the US administration, specifically US Special Envoy to the Middle East Steve Witkoff, has been in regular contact with his Iranian counterpart, helping to temper some of the emotional fallout striking off-market traders on Thursday. Iranian Foreign Minister Abbas Araghchi reportedly signaled to US Envoy Witkoff that the Iranian government is willing to be 'flexible' on its nuclear plans and resume talks, but only if Israel ceases its long-range missile strikes. Iranian Foreign Minister Araghchi stated that he will travel to Geneva on Friday to meet with his European counterparts as well.

The trading week will end on a quiet note as far as the economic data docket is concerned. The Federal Reserve (Fed) held interest rates steady this week, as investors broadly expected. However, a slight hopeful shift in Fed Chair Jerome Powell's tone bumped trader hopes for a September rate cut slightly higher, albeit with the caveat that Fed officials want to see further progress on both inflation and the labor market before that decision can be made.

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Coming up next week: US economic data will again dominate investor sentiment in between geopolitical headlines. Business sentiment indicators are due early next week, followed by Fed Chair Powell's testimony before Congressional and Senate financial committees. Next week will wrap up with key inflation metrics scheduled for release on Friday.

Dow Jones price forecast

Holiday trading hours and anemic trade volumes means Thursday's price action should be taken with a grain of salt; however, the Dow Jones Industrial Average has fallen back to the 200-day Exponential Moving Average (EMA) near 41,800 as geopolitical concerns weigh on equity markets. Bullish momentum has fizzled over the past week after the DJIA flubbed a topside run at the 43,000 handle, but limited downside could see a fresh bullish bounce off of major technical averages when US markets kick back into action following the holiday.

Dow Jones daily chart