Dow Jones: US 30 Rallies as Apple Lifts Stock Market and Indices Outlook

Apple Kicks Off May With a Bang and the Dow Is Pointing at a Record

Apple reported and the Dow futures responded. Record highs on Thursday and now the market is pointing at another breakout Friday morning with June E-mini Dow Jones futures up about 200 points before the open. Apple is doing most of the work. Lower crude oil is helping. Tech is leading and energy is the one sector getting left behind.

Apple Did What It Needed To Do

Up more than 3% before the open and it earned every point. Revenue beat, earnings beat, and the forward guidance was strong enough to give investors something to hold onto going into the summer quarter. iPhone sales were soft and nobody is hiding from that number. But the business overall is not wobbling and the market is making that call this morning. When Apple moves like this on earnings day it does not need help from the rest of the tape. It pulls the index with it.

The S&P 500 and Nasdaq both closed at record highs Thursday. The Dow posted solid gains on top of that. The way I see it, the April rally did not come from one catalyst. Earnings held. Every dip got bought. Geopolitical risk stopped getting worse and that was enough. April did not need a clean story. It just needed the bad news to stop accelerating.

Stocks in the News

Roku surged after beating revenue expectations and guiding higher. Twilio is one of the biggest movers of the morning after a strong earnings beat. Reddit jumped on solid user growth and improving guidance. Estee Lauder is higher after better sales and additional cost cuts. Moderna beat expectations and held its full-year forecast.

On the downside, Roblox is getting hit hard after cutting its full-year forecast. Rivian is lower despite a better than expected loss as the electric vehicle space stays under pressure. Amgen slipped after a cautious outlook raise.

Crude Oil Is the Variable I’m Watching

Crude is down this morning and the Dow is getting a lift from it. I’ve watched this connection play out enough times to know how it works. Oil pulls back, the inflation math looks better, rate cut talk gets a little louder, and money rotates out of energy into everything else. That is exactly what is happening right now. Energy stocks are paying for it and the rest of the market does not care.

The part I keep coming back to is how fast that can flip. Crude does not need a big move to change the tone in here. I’ve seen crude spike into the close and take a perfectly good rally with it. April was a big month. Big months create big profits and big profits create sellers when oil gives them the excuse. The Dow does not need crude to fall apart. It needs crude to stay out of the way. Right now it is. That is the variable I am watching all session.

June E-mini Dow Jones Futures Technical Outlook

The June E-mini Dow Jones futures contract is higher shortly before the cash market opening. The early price action indicates the market is attempting to breakout over the April 21 main top at 50043. If accomplished, this move would put the futures contract in a position to challenge the record high at 50932, reached on February 10.

Yesterday’s rally was fueled by an after-hours surge, following the release of the Apple earnings report after the close. The price action made 48608 a new main bottom.

The support is the retracement zone at 48686 to 47992. Dow futures are also being underpinned by the 50-day moving average at 48069 to 47934.

Holding major support and a strong uptrend according to the swing chart and the moving averages have put the market in a bullish position to do some upside damage. The catalysts are weaker oil prices and solid quarterly results from Apple. I’d pay attention to crude prices since they are the variable. If they spike higher into the close, the Dow rally could stall or even reverse. However, steady-to-lower crude prices should be supportive throughout the session.

Dow Jones Industrial Average Outlook

The strong close in the cash market on Thursday and the bullish news from Apple have put the cash market in a position to gap higher on Friday. The expected breakout over 49848.69 will put the Dow in a position to surge toward the all-time high at 50512.79.

In my opinion, the key factor that could derail the rally is a spike in oil prices. This may not change the trend, but it will give investors an excuse to book profits, curtailing momentum.

Minor support is the swing bottom at 48708.57. Major support is the retracement zone at 48428.79 to 47785.04. The uptrend is being solidly supported by the 50-day moving average at 47858.00 and the 200-day moving average at 47181.96. As long as they hold as support, investors are likely to remain in buy the dip mode.

What to Watch

The Dow is pointing at its all-time high at 50512.79 and the June E-mini Dow Jones futures are setting up the same push toward 50932. The breakout over 49848.69 in the cash market is the first confirmation I want to see. From there crude oil prices are the governor on how far this goes today. Strong earnings carried April. Crude oil and what happens in the Middle East negotiations over the weekend will set the tone for how May opens next week.

More Information in our Economic Calendar.