Dow Prediction: Uptrend to Resume This Week after the Sharp Pullback
After a brutal midweek selloff, Dow Jones staged a modest recovery on Friday, supported by technical levels and optimism around Nvidia and..
Quick overview
- After a significant selloff, the Dow Jones saw a modest recovery on Friday, buoyed by technical support and optimism regarding China and Nvidia.
- Despite Friday's rebound of approximately 1.50%, major indices still closed lower for the week, with the Dow down 1.75%.
- Market sentiment improved partly due to speculation about potential sales of Nvidia's H200 chips to China, although no final decision has been made.
- The sustainability of the market's recovery will depend on the Dow's ability to surpass the 50-day moving average and developments related to China and Nvidia.
Live DOW Chart
After a brutal midweek selloff, Dow Jones staged a modest recovery on Friday, supported by technical levels and renewed optimism around China and Nvidia.
A Sharp Selloff Shakes Market Confidence
Equity markets remained under heavy pressure last week, culminating in a steep decline on Thursday despite stronger-than-expected earnings from Nvidia the day before. Selling swept across major indices as risk sentiment deteriorated and traders moved to reduce exposure. The pace of the retreat raised concerns that the recent rally in equities had finally run out of steam.
By the end of Thursday’s session, confidence was fragile and technical levels were testing the limits of investor patience. However, as Friday approached, sentiment began to shift. A better tone from China-related developments and the emergence of key technical support levels helped stabilize markets and encourage dip-buying.
Dow Jones Finds Support at a Critical Level
On Friday, the Dow Jones Industrial Average rebounded by around 1.50% after holding firm at the 100 daily simple moving average (green). This level once again proved to be an important line of defense for buyers. The rebound was steady throughout the session, lifting overall market morale after days of persistent losses.
Dow Jones Chart Daily – The 100 SMA Held As Support
Despite this recovery, the rally ran into early resistance. The 50 daily SMA (yellow) capped further upside, acting as a technical ceiling for the index. For the broader uptrend to regain traction next week, the Dow will need to break and hold above this level. Until that happens, the rebound remains tentative rather than confirmed.
Even with Friday’s bounce, the major indices still closed lower for the week. The Dow Jones finished at 46,245.56 points, down 822.65 points or -1.75%. The S&P index closed at 6,602.96 points, losing 110.62 points or -1.65%. The NASDAQ ended the week at 22,273.08 points, down 515.23 points or -2.26%.
Nvidia and China Headlines Lift Sentiment
Part of Friday’s improved mood came from a report suggesting that Donald Trump’s team may be considering allowing Nvidia’s H200 chips to be sold to China. This idea has circulated several times over the past month, and even the possibility of such a move was enough to boost sentiment.
Nvidia shares bounced from around $173, helping spark a broader rise across technology stocks and the wider market. The H200 belongs to the Hopper generation, which trails the newer Blackwell architecture, yet its potential approval still marked a notable shift in tone. Previously, Nvidia’s H100 chips had been blocked from sale to China since 2022, even before they reached the market.
The report emphasized that no final decision has been made and that the proposal may remain an internal discussion. Any move would still require official license approval under export control rules put in place in 2022, keeping uncertainty firmly in place.
A Temporary Pause or the Start of a Rebound?
Despite lingering doubts, Friday’s rally offered a welcome respite after Thursday’s sharp drop. Some investors believe Nvidia chips are already making their way into China through indirect channels, and that formal approval would simply streamline the process.
For now, markets have found a moment of calm. Whether this relief turns into a sustained recovery will depend largely on the Dow’s ability to reclaim the 50-day moving average and on how the situation surrounding China and Nvidia develops in the coming days.
Dow Jones Live Chart
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