- The Dow Jones remained stagnant about 42,800 on Tuesday.
- The market rally driven by optimism about the continuation of tariff reduction may be slowing down.
- The US government’s budget battle continues while the Trump administration struggles to overcome large deficits.
The industrial average Dow Jones (DJIA) paused in its recent bullish impulse, staying close to the 42,800 region on Tuesday. The shares are taking a respite from their recovery after tariffs while investors expect significant progress in commercial conversations.
The Trump administration is facing an obstacle when trying to make its budget approved by Congress, complicating things for President Donald Trump. Contrary to Trump’s campaign promises to eliminate the federal budget deficit in its first six months in office and eliminate the burden of the US federal debt in “A couple of years”, its budget proposal, which has called its “great and beautiful bill”, is expected to add almost 4 billion dollars to the debt load of the US government in the next ten years. The Tax and Expenses Bill, which includes drastic cuts in many federal services, but also includes severe reductions in government tax revenues, faces strong opposition within Trump’s own Republican party, since hard contingents of representatives do not agree fundamentally in aspects of the budget.
According to some hard republicans, the Tax Law does not include enough cuts in the expense of essential services. Other Republicans are annoying because the budget does exactly the opposite of Trump’s campaign platform to reduce government spending, and instead adds significantly to US debt load.
Tariffs are still a big problem, but markets have hope of a solution
The Trump administration has been strongly pressing to announce a series of trade agreements before the end of the 90 -day grace period of its own “reciprocal tariffs.” The feeling of the market remains firmly anchored to the hope that the Trump administration will achieve what it needs to get away from its own foot in global trade. Investment managers have noticed the lack of solid factors that support the optimism of the stock market, with US Bank investments management, Bill Northey, pointing out that markets are in a state of “optimism without clarity”, stating:
I would say that the greatest consideration is the fact that we have had the fall related to the introduction of tariffs, the furious rally associated with the de -escalation of these tariff implementations, and now we are waiting for clarifications since many of these negotiations are ongoing.
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Dow Jones price forecast
The Dow Jones industrial average reached a weak point in the impulse on Tuesday, staying stable after a three -day streak. The Dow Jones remains firmly planted in the upward territory, having closed flat or upward in all but five of the last 19 consecutive negotiation sessions.
Despite the coldest activity on the market on Tuesday, the main stock market index has closed up for four consecutive weeks and is on the way to a fifth consecutive upward week after a strong start this week. The Dow Jones has continued to rise above the 200 -day exponential mobile average (EMA) around 41,500, and has increased almost 17% since the fall induced by April tariffs that saw the Djia fall to 36,600.
Dow Jones daily graphics
Dow Jones Faqs
The Dow Jones Industrial Avenge, one of the oldest stock market indexes in the world, consists of the 30 most negotiated values in the United States. The index is weighted by the price instead of capitalization. It is calculated by adding the prices of the values that compose it and dividing them by a factor, currently 0.152. The index was founded by Charles Dow, also founder of the Wall Street Journal. In recent years it has been criticized for not being sufficiently representative, since it only follows 30 companies, unlike broader rates such as S&P 500.
There are many factors that promote the Dow Jones Industrial Average (DJIA) index. The main one is the added performance of the companies that compose it, revealed in the quarterly reports of business benefits. The American and world macroeconomic data also contribute, since they influence investor confidence. The level of interest rates, set by the Federal Reserve (FED), also influences the DJia, since it affects the cost of credit, on which many companies depend largely. Therefore, inflation can be a determining factor, as well as other parameters that influence the decisions of the Federal Reserve.
Dow’s theory is a method to identify the main trend of the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Avenge (DJIA) and the Dow Jones Transportation Average (DJTA) and just follow the trends in which both move in the same direction. The volume is a confirmation criterion. The theory uses elements of maximum and minimum analysis. Dow’s theory raises three phases of the trend: accumulation, when intelligent money begins to buy or sell; Public participation, when the general public joins the trend; and distribution, when intelligent money abandons the trend.
There are several ways to operate with the DJ. One of them is to use ETF that allow investors to negotiate the DJ as a single value, instead of having to buy shares of the 30 companies that compose it. An outstanding example is the SPDR Dow Jones Industrial Avenge ETF (day). Future contracts on the DJ allow the specular operators about the future value of the index and the options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Investment funds allow investors to buy a part of a diversified portfolio of DJ values, which provides exposure to global index.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
