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Dow Jones Futures extend losses with trade uncertainty weighing on sentiment

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Dow Jones Futures extend losses with trade uncertainty weighing on sentiment

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update 2025.07.08 19:51
Dow Jones Futures extend losses with trade uncertainty weighing on sentiment

update 2025.07.08 19:51

  • Dow Jones Index Futures point to a slightly negative opening with tariff fears looming.
  • Trump postponed the deadline to August 1 and kept the door open for negotiations, which has eased risk aversion.
  • A cautious market mood is weighing on equities and supporting the US Dollar and Treasury yields on Tuesday.

Dow Jones Index Futures point to a slightly negative opening on Tuesday following a significant decline on Monday. Futures markets anticipate a 0.15% decline in the DJIA, while the Nasdaq Index futures add 0.15% and the S&P trades flat ahead of the opening bell.

Investors remain wary of risk amid Trump's erratic trade policy. The US administrations sent letters to a batch of countries, including Japan and South Korea, confirming levies of 25% to the second and third major US partners in Asia.

The US president, however,  postponed the implementation day to August 1, and kept the door open to adjustments if a trade deal is reached, which left markets wondering which taxes will finally be applied and when.

The latest tariff developments have contributed to easing the risk-averse sentiment seen on Monday, which triggered a nearly 1% drop on the Dow Jones Index, extending its reversal from last week's four-month highs above 44,800 to session lows below 44,200.

The sour market sentiment is providing some support to the safe-haven US Dollar, which maintains a moderately bid tone on Tuesday, with the USD Index moving near 97.00, supported by rising US Treasury yields.

Dow Jones FAQs

The Dow Jones Industrial Average, one of the oldest stock market indices in the world, is compiled of the 30 most traded stocks in the US. The index is price-weighted rather than weighted by capitalization. It is calculated by summing the prices of the constituent stocks and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years it has been criticized for not being broadly representative enough because it only tracks 30 conglomerates, unlike broader indices such as the S&P 500.

Many different factors drive the Dow Jones Industrial Average (DJIA). The aggregate performance of the component companies revealed in quarterly company earnings reports is the main one. US and global macroeconomic data also contributes as it impacts on investor sentiment. The level of interest rates, set by the Federal Reserve (Fed), also influences the DJIA as it affects the cost of credit, on which many corporations are heavily reliant. Therefore, inflation can be a major driver as well as other metrics which impact the Fed decisions.

Dow Theory is a method for identifying the primary trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only follow trends where both are moving in the same direction. Volume is a confirmatory criteria. The theory uses elements of peak and trough analysis. Dow's theory posits three trend phases: accumulation, when smart money starts buying or selling; public participation, when the wider public joins in; and distribution, when the smart money exits.

There are a number of ways to trade the DJIA. One is to use ETFs which allow investors to trade the DJIA as a single security, rather than having to buy shares in all 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts enable traders to speculate on the future value of the index and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds enable investors to buy a share of a diversified portfolio of DJIA stocks thus providing exposure to the overall index.

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Date

Created

 : 2025.07.08

Update

Last updated

 : 2025.07.08

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