Dow Jones Industrial Average grapples with recursive trade talk

• The Dow Jones churned the charts on Tuesday as investors continue to await clarity.
• Second verse, same as the first: Trump says new tariff deadline will not be canceled or extended.
• Additional double-digit tariff levels have been announced by Trump, crimping market sentiment.

The Dow Jones Industrial Average (DJIA) struggled to maintain its balance on Tuesday, churning chart paper near 44,350 as the Trump administration angles to keep the pressure on trade talks. President Trump announced additional tariffs of 25% on all imports from South Korea and Japan, set to come into effect on August 1 alongside the twice-delayed reciprocal tariffs announced in early April.

Echoes of the past: no tariff delays, and this time we mean it

Donald Trump has listed 14 countries that will face additional tariffs on August 1 if trade deals aren't secured by that date. In echoes of previous warnings delivered by Trump himself, the August 1 deadline for reciprocal tariffs is set in stone and won't be delayed or suspended. The exact same cautionary statement was made by Trump as recently as last week, regarding the July 9 reciprocal tariff deadline, which has since been delayed or suspended.

Economic data remains limited throughout the week, giving investors some room to breathe on the data front following last week's tumultuous labor data dump. The Meeting Minutes from the Federal Reserve's (Fed) latest rate discussions will be released on Wednesday, giving market participants a closer look at how near or far the Fed might be from delivering its next rate cut. As trade talk continues to heat up while also getting kicked further down the road, the odds of a quarter-point rate cut are looking less like a sure thing. According to the CME's FedWatch tool, the chances of a push to October are rising in rate markets.

Dow Jones price forecast

A fresh bout of technical weakness has dragged the Dow Jones Industrial Average back below 44,400 following a strong bullish performance through the last third of June. The major equity index peaked near 44,800, failing to breach all-time highs north of the 45,000 handle.

Despite a near-term pivot into the bearish side, the Dow remains firmly planted in bull country, trading far above the 200-day Exponential Moving Average (EMA) 42,460. A continued grind into the low side could be on the cards with technical oscillators still pinned in overbought territory, but near-term declines will likely crystallize into new buying opportunities.

Dow Jones daily chart