Dow Futures Point to Positive Trend Amid Earnings Reports and Fed Meeting

U.S. stock futures remained steady during Monday's evening deals, following a positive session in major benchmark averages. The Dow Jones Industrial Average led Wall Street higher, achieving its longest winning streak in six years. This surge was driven by investor confidence in sectors beyond technology, with a week filled with earnings reports and a Federal Reserve meeting.

Energy stocks performed exceptionally well, with the Dow extending its winning streak to an eleventh-straight gain. The rally in energy was supported by better-than-expected quarterly results from big tech companies and the Federal Reserve's decision. Energy giants like Halliburton Company, Occidental Petroleum Corporation, and Chevron Corp were among the top gainers, benefitting from a rise in oil prices to April highs on the back of expected OPEC supply cuts.

The S&P 500 also experienced an increase, driven by similar factors that contributed to the rise in the Dow. However, the tech-heavy Nasdaq Composite Index, which has outperformed its peers this year, lagged behind as investors sought bargains in non-tech sectors, boosting areas like energy and banks.

The survey data highlighted that U.S. business activity in July slowed down for the fifth consecutive month, primarily driven by a decline in the service sector's growth. Nonetheless, the survey results were comparatively better than those observed in Europe. Additionally, the report indicated that falling input prices and a decrease in hiring suggested progress on important fronts in the Federal Reserve's efforts to combat inflation.

Despite a survey indicating a slowdown in U.S. business activity, investors seemed undeterred. The U.S. dollar's strength was supported by resilient economic data, indicating the country's relative economic strength compared to other major currencies.

Looking ahead, investors are closely monitoring housing price index and consumer confidence data, as well as quarterly earnings results from companies like Microsoft Corporation, Alphabet Inc Class C, Visa Inc Class A, Texas Instruments Incorporated, Verizon Communications Inc, General Electric Company, and UBS Group AG.

Additionally, all eyes are on the upcoming U.S. Federal Reserve's interest rate decision. Economists predict a further 25 basis point rate hike, which is likely to be the last of the current tightening cycle, considering recent data showing signs of disinflation. As a result, the projected direction for Dow futures points toward a positive trend in the short run.

Data for Technical Analysis (5H) CFD US30 DJIA

Resistance : 35452.8, 35471.6, 35501.9

Support : 35392.2, 35373.4, 35343.1            

5H Outlook

Source: Investing.com                                         

Buy/Long 1 If the support at the price range 35382.2 - 35392.2 is touched, but the support at 35392.2 cannot be broken, the TP may be set around 35461.5 and the SL around 35377.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 35452.8 - 35462.8, TP may be set around 35501.0 and SL around 35384.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 35452.8 - 35462.8 is touched, but the resistance at 35452.8 cannot be broken, the TP may be set around 35382.1 and the SL around 35467.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 35382.2 - 35392.2, TP may be set around 35343.0 and SL around 35460.0, or up to the risk appetite.       

Pivot Points Jul 25, 2023 02:27AM GMT

Sources: Investing 1, Investing 2