Dow Jones Prediction: Bounce Off Support as Investors Brace for NFP Jobs Data for Trend Continuation

The tone for a crucial week ahead, with the employment data in the spotlight, was set by a late-session rally on Wall Street that helped...

Equities Find Their Footing as Inflation Coolness Sparks Buying

Quick overview

  • U.S. stocks rebounded on Friday, ending a three-day losing streak and setting the stage for a pivotal week focused on the jobs report.
  • The Nonfarm Payrolls report is anticipated to be a key market catalyst, with a forecast of 51,000 jobs that could influence Federal Reserve tightening expectations.
  • The Dow Jones led the market rally, supported by gains in Boeing, Tesla, and Intel, indicating strong buying interest at key technical levels.
  • The PCE inflation report aligned with expectations, providing some relief but also moderating aggressive rate cut expectations from the Federal Reserve.

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The tone for a crucial week ahead, with the employment data in the spotlight, was set by a late-session rally on Wall Street that helped U.S. equities recover midweek losses.

Wall Street Regains Its Footing

U.S. equities staged an impressive comeback Friday afternoon, snapping a three-day losing streak and ending the week virtually flat. Investors shifted their attention to upcoming economic data, with the Nonfarm Payrolls (NFP) report due Friday as the week’s key catalyst.

Unemployment Claims data from the prior week came in better than expected, suggesting resilience in the labor market. While the NFP forecast stands at a modest 51,000 jobs, traders see that as market-friendly: a slightly weaker jobs number could temper Federal Reserve tightening expectations, while a stronger result might ignite further gains for stocks.

A Choppy Session Ends on a High Note

Markets opened Friday on a positive note after the Personal Consumption Expenditures (PCE) inflation report landed in line with expectations, easing concerns about a resurgence in price pressures. The data encouraged early buying, lifting stock futures and pushing the S&P 500 up by 30 points at the open, while the U.S. dollar slipped lower.

By midday, however, the initial enthusiasm faded as investors questioned whether the rally had legs. The market drifted lower until late afternoon when renewed buying sparked a strong upward reversal, propelling indices back near their session highs by the close.

Technical Strength in the Dow

The Dow Jones Industrial Average led the charge higher in the final hour, bouncing off technical support near its 20-day simple moving average (SMA) on the daily chart. Boeing, Tesla, and Intel were notable gainers, contributing to the blue-chip index’s rebound and offering a signal that buyers were stepping in at key levels.

Dow Jones Chart Daily – The 20 SMA Acting As Support During Pullbacks

Friday’s Closing Numbers

  • S&P 500: rose 38.98 points (+0.6%) to 6,643.70
  • Nasdaq Composite: added 99.37 points (+0.4%) to 22,484.07
  • Dow Jones Industrial Average: climbed 299.97 points (+0.7%) to 46,247.29
  • Russell 2000: advanced 23.28 points (+0.8%) to 2,434.32

Inflation Data Brings Some Relief

The PCE report’s alignment with forecasts offered reassurance that inflationary pressures remain contained, though the data trimmed expectations for aggressive Federal Reserve rate cuts next year by about 12 basis points. That shift capped some of the upside momentum in equities despite the positive tone.

Even with Friday’s strong rebound, the rally was insufficient to erase the week’s earlier declines. Still, the late-day buying spree left markets on firmer footing, with technical levels holding and investor sentiment steadier heading into a crucial week dominated by employment data.

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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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