Dow Jones: Can This Week’s Rebound Sustain Its Upward Momentum?

Market Surges: Is This the Beginning of a New Uptrend?

US stock futures pulled back Friday following a strong rebound in the previous session. The market is working to recoup losses from this week’s sell-off, with major indices still showing negative weekly performance.

At 12:53 GMT, Dow Jones Futures are trading 39490.00, down 111.00 or -0.28%. The S&P 500 Index is at 5326.75, down 21.50 or -0.40% and the Nasdaq 100 Index is trading 18420.25, down 105.00 or -0.57%.

Wall Street’s Impressive Turnaround

Thursday saw a remarkable recovery in US equities. The S&P 500 soared 2.3%, marking its best day since November 2022. The Dow Jones Industrial Average jumped nearly 1.8%, while the Nasdaq Composite climbed 2.87%. Trading volume was substantial, with 87% of NYSE volume and 80% of Nasdaq volume moving higher.

Weekly Losses Persist

Despite Thursday’s rally, major indices haven’t erased their weekly declines. The S&P 500 is down 0.5%, while the Nasdaq and Dow have fallen approximately 0.7%. Both the S&P 500 and Nasdaq are on track for their fourth consecutive week of losses.

Corporate News: Paramount and Take-Two in Focus

Paramount Global shares rose 4.5% in premarket trading after announcing major job cuts and surpassing earnings expectations. Take-Two Interactive gained over 7% premarket after confirming its full-year guidance, despite slightly missing revenue forecasts.

Investor Sentiment Improves

The recent market decline seems to be attracting buyers, with many viewing it as a necessary correction. Thursday’s upswing was partly fueled by positive weekly jobless claims data, which eased worries about labor market health and overall economic stability.

Expert Analysis

Terry Sandven, chief equity strategist at US Bank Wealth Management, maintains a positive long-term outlook for stocks. However, he cautions that short-term volatility is likely due to high valuations and seasonal patterns.

Market Forecast: Uneven Progress Ahead?

The market is expected to continue its upward movement, but not without some bumps. Goldman Sachs traders anticipate further gains, noting the historical success of buying 5% dips in the S&P 500. While short-term price swings may continue, the overall market outlook remains positive, supported by favorable fundamentals.

Technical Analysis

E-mini Dow futures are edging lower shortly before the cash market opening on Friday. Despite heightened volatility earlier in the week, the market seems to have firmly establish support on the 200-day moving average at 38874.

Currently, the Dow is within striking distance of the 50-day moving average at 39800. This price is expected to act like resistance and a trigger point for an acceleration to the upside.

If sellers come in on the initial test of the 50-day MA then look for a rangebound trade to develop. This will also suggest investor indecision.

If buyers can overtake the 50-day MA then look for an extension of the rally.