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The Dow Jones Industrial Average (DJIA) caught a healthy rebound on Friday, climbing over 700 points to round out an otherwise bearish trading week. Key Federal Reserve (Fed) officials sounded more willing to deliver an upcoming interest rate cut than rate markets previously expected, bolstering investor sentiment across the board, and the Trump administration is rumored to be weighing another walkback on arbitrary tech trade restrictions aimed at China.

Despite Friday upswing, indexes still on the defensive

Despite an upbeat Friday session, the Dow is still in the red for the week, down 1.33% from the previous week’s close and mired in defensive technical territory near the 46,000 handle. The major equity index has closed bearish for all but one of the last six straight trading days, and Friday’s upswing is pushing the Dow into a tricky technical zone that includes old support zones that may act as resistance moving forward, as well as key moving averages, which could turn into price action ceilings.

December Fed rate cut back on the table

Fed Bank of New York President John Williams stated on Friday morning that he sees a high likelihood of a “further adjustment in the near term” for interest rates, sending markets piling back into bets of a third straight interest rate cut on December 10. Divisions within the Fed’s rate-setting Federal Open Market Committee (FOMC) have widened in recent months, giving traders a wide array of policy opinions to focus on. According to the CME’s FedWatch Tool, rate markets are now pricing in a 70% chance of a third consecutive quarter-point rate trim on December 10, versus the roughly 40% odds that were on the tape as recently as Thursday afternoon.

The Trump administration has hit a steady stream of trade policy walkbacks and tariff cancellations over the past week, and the trade war cancellation train is beginning to gather steam. According to fresh rumors, the Trump team is weighing walking back its decision to restrict the sale of AI-focused chipsets to China. The move, if it goes through, would allow AI darling Nvidia (NVDA) to continue selling even more shovels during the LLM gold rush. The alleged topic on the table is Nvidia’s H200-series GPUs, which typically sell for around $30,000 and make up a growing bulk of Nvidia’s unsold product inventory, which has swelled rapidly over the past quarter.

Consumers tilt back toward hope

University of Michigan (UoM) consumer sentiment survey results also came in better than expected, further bolstering investor sentiment to wrap up an overwhelmingly fearful week in markets. The UoM Consumer Sentiment and Expectations Indexes both rose more than expected for November, and 1-year and 5-year Consumer Inflation Expectations also eased lower.

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Dow Jones daily chart

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