- The American economy contracts in the first quarter, first contraction since 2022, motivated by the increase in imports.
- ADP Jobs Data disappoints; Core PCE holds 2.6%, endearing stagflation problems.
- Fed saw cup rates from July; The price of markets in nearly 100 base points of relaxation for 2025.
The Dow Jones Industrial Average (DJIA) plunged more than 200 points or more than 0.51% while the economy in the United States (United States) has first contracted since 2022, feeding fears that the economy could risk a recession under the Trump administration. At the time of writing the time of writing, the DJIA clings to the 40,300 mark after falling daily peaks reached 40,614.
DJIA drops from 0.51% to 40,300 while GDP contracts from the first sorting
The US trade department has revealed that gross domestic product (GDP) for the first quarter of 2025 decreased by -0.3%, missing the bar for an expansion of 0.3% and a drop in relation to the 2.4% increase in T2 2024. By digging in the report, the sharp increase in imports of more than 41% was the main reason for softer reading.
Other data in the midst of an occupied American economic file revealed that companies hired fewer people than expected. The national employment change of the ADP in April failed to estimates 115K, to 62K. At the same time, the favored inflation gauge of the United States Federal Reserve (Fed) revealed by the Personal Consumer Consumer expenses (PCE) index of the US Personal Consumer Bureau (PCE), increased by 2.6%, as expected, decreasing compared to the increase of 3% in February.
After GDP data, the main Wall Street indices have plunged, although they have reduced some of their losses, because another measure of the data suggested by household expenses remains solid. Personal expenses in March increased by 0.7% MOM, against the 0.5% bar of February.
Recently, US President Donald Trump said that “a major bill on a big one” could be greater than prices, adding that any tax increase was not sustainable if the 2017 reductions do not continue. He blamed ex-President Joe Biden for economic withdrawal, even if companies were preparing for prices and imports before being promulgated, which was a counterweight to healthy expenses and investments.
Fed should reduce rates
The data from the Chicago Board of Trade (CBOT) show that the exchange market is expected to 99 base points of relaxation towards the end of the year, as revealed by the event contract of federal funds of December 2025.
Merchants had a 100% price that the Fed would reduce rates at the July 30 meeting. Fawad Razaqzada at City Index and Forex.com said: “The Fed is now more likely to intervene earlier with its rate drops to support a difficulty saving, while data weakness could also encourage Trump to lose interest in prices and conclude agreements, more quickly.”
Before the week, merchants are considering the release of the ISM Manufacturing PMI for April and non -agricultural pay figures for the same period.
Dow Jones Price forecast
The Dow Jones remains neutral for downwards despite the recovery of a land and the recovery of the 40,000 mark. Although buyers have cleaned the simple 20 -day mobile average (SMA) of 39,800, as long as the DJIA remains unable to generate the figure of 41,000, the risks for a bewellet in a lower recovery.
If buyers recover 41,000, they could test the key resistance levels are above the head. First of all, the SMA of 50 days to 41,399, followed by the SMA of 200 days to 42,274. On greater force, the SMA of 100 days to 42,535.
Conversely, a drop below 40,000 erases the April 23 testing path from 39,486, followed from April 22 of 39,271 to fill the difference observed between April 22 and 23.
Dow Jones FAQ
The industrial average of Dow Jones, one of the oldest stock market indices in the world, is compiled with the 30 most negotiated shares in the United States. The index is balanced by the price rather than weighted by capitalization. It is calculated by adding the prices of the actions of the constituents and by dividing them by a factor, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. Later, it was criticized not to be representative enough, because it only follows 30 conglomerates, unlike wider clues such as the S&P 500.
Many different factors stimulate the industrial Dow Jones (DJIA). The overall performance of component companies revealed in the profits reports of quarterly companies are the main one. American and global macroeconomic data also contribute because it has an impact on the feeling of investors. The level of interest rate, fixed by the Federal Reserve (Fed), also influences the DJIA because it affects the cost of the credit, on which many companies are highly deposited. Consequently, inflation can be a major engine as well as other measures which have an impact on the decisions of the Fed.
Dow theory is a method for identifying the main trend of the stock market developed by Charles Dow. A key step is to compare the management of the industrial average Dow Jones (DJIA) and the Dow Jones transport (DJTA) and only follow the trends where the two move in the same direction. Volume is a confirmation criterion. The theory uses elements of peak and hollow analysis. Dow theory poses three trend phases: accumulation, when smart money begins to buy or sell; Public participation, when the wider public joins; And distribution, when smart money comes out.
There are several ways to exchange the DJIA. One is to use FNBs that allow investors to exchange the DJIA as a single guarantee, rather than having to buy shares in the 30 constituent companies. A leading example is the SPDR Dow Jones Industrial Average Etf (DIA). DJIA term contracts allow traders to speculate on the future value of the index and options provide the right one, but not the obligation, to buy or sell the index at a predetermined price in the future. The mutual funds allow investors to buy a part of a diversified DJIA shares portfolio, offering exposure to the overall index.
