Dow Jones Ends at Highs as Stocks Recover, Indicates Bullish Break Next Week!

Despite disappointing jobs data, US markets, particularly the Dow Jones, finished the week strongly, as investor confidence was supported by decreasing geopolitical tensions and renewed risk appetite.

Strong Close Caps Off a Bullish Week

Markets closed out Friday with impressive gains across the board, ending a week marked by optimism and upward momentum. While initial headlines from the non-farm payrolls report appeared to match expectations, the underlying data—once revisions and participation adjustments were accounted for—painted a slightly softer picture of labor market conditions.

Still, the market’s reaction told a different story. Rather than selling off, equities rallied strongly into the close, suggesting that earlier caution—possibly triggered by the weaker-than-expected ADP numbers earlier in the week—had cleared. Investors seemed poised to buy the dip once a key risk event passed, igniting a powerful end-of-week rally.

US-China Sentiment and Geopolitical Calm Support Risk Appetite

Part of the market’s resilience may be attributed to a steadier tone in global relations, particularly regarding the US and China. Headlines this week reflected improved diplomatic signaling, which likely contributed to the bullish risk sentiment. The easing of geopolitical tensions was also reflected in the commodity space, where gold prices fell—highlighting reduced demand for traditional safe havens.

Dow Compresses Near Key Resistance, Breakout Likely

The Dow Jones Industrial Average continues to trade in a narrowing range, caught between significant moving averages. It remains constrained just under its 200-day simple moving average, around the 43,000 level, while the 50-week SMA is gradually pushing higher from below. This tightening structure suggests an imminent breakout, with mounting upward pressure and improving technical sentiment.

Dow Jones Chart Weekly – Testing the 20 SMA Again

Meanwhile, the S&P 500 crossed a psychological milestone, closing firmly above the 6,000 mark. The Nasdaq Composite and Russell 2000 also posted strong daily gains, with the latter outperforming on a weekly basis. The Russell’s 3.18% weekly surge is particularly noteworthy, pointing to growing confidence in small-cap, growth-oriented sectors—often seen as barometers for risk sentiment and economic optimism.

Looking Ahead: Data and Fed Commentary in Focus

Heading into the new week, market participants will closely monitor upcoming inflation data and commentary from Federal Reserve officials. If macro indicators remain steady and policymakers reinforce a soft-landing scenario, the conditions could support continued strength in equities through the early summer.

Friday Daily Close Highlights – June 6, 2025

Dow Jones Industrial Average

• Closed at 42,762.87, up +443.13 points or +1.05%
• Marked its largest single-day point gain in over two weeks

S&P 500

• Finished at 6,000.36, gaining +61.06 points or +1.03%
• Crossed the psychological 6,000 level for the first time on a closing basis

Nasdaq Composite

• Settled at 19,529.95, rising +231.50 points or +1.20%
• Led by strength in tech megacaps and AI-related names

Russell 2000 (Small Caps)

• Closed at 2,132.25, up +34.89 points or +1.66%
• Continued its outperformance vs large caps, fueled by renewed risk appetite

Weekly Performance Overview

Dow Jones Industrial Average

• Gained +562.93 points or +1.33%
• Benefited from broad-based cyclical strength and financials

S&P 500

• Added +103.68 points or +1.76%
• On track for a fourth consecutive weekly gain

Nasdaq Composite

• Jumped +466.89 points or +2.45%
• Tech sentiment remained upbeat amid declining rate fears

Russell 2000

• Advanced +65.74 points or +3.18%
• Posted its strongest weekly gain since early April