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The Dow Jones Industrial Average (DJIA) clawed back recent losses on Monday, gaining just enough ground to keep the major equity index camped within near-term congestion. Tech stocks lead the market higher, with above-expectations earnings reports thus far helping to further bolster general market sentiment.

Tariffs, earnings, and too-low expectations

Trade and tariffs remain the talk of the trade town. Key members within the Trump administration have reiterated that August 1 is now the new “hard deadline” for trade deals before the reciprocal tariffs package, plus a slew of other, new tariff threats over the past two weeks, come into effect. The “liberation day” tariffs, initially announced in April, were suspended by President Donald Trump until July 9, before being suspended again until the beginning of August. Markets have become accustomed to expecting a pivot from the Trump administration on its own tariff threats at the eleventh hour, and Trump’s attempts to raise the ante with additional double-digit tariff levels are having less and less effect on markets.

Earnings season has bolstered equity markets, with around 85% of the latest earnings calls beating analyst expectations thus far. Some key tech labels, including Google parent Alphabet (GOOGL) and headline-generator Tesla (TSLA), will be posting their latest earnings this week. However, some have noted that analyst expectations may be gaming the table. Sam Stovall, chief investment strategist at CFRA Research, spoke to CNBC and noted:

“Rarely do you injure yourself falling out of a basement window. With expectations so low in earnings, I think that the end result will end up being better than anticipated.”

A quiet week on the calendar, but headlines persist

Outside of this week’s earnings reports, little of note is on the economic data docket. The latest Purchasing Managers Index (PMI) figures are due on Thursday, with backdated Durable Goods Orders slated for Friday.

The Trump administration's ongoing campaign to oust Federal Reserve (Fed) Chair Jerome Powell continues this week. Trump allies within Congress have motioned for the Fed head to face criminal charges over claims of perjury regarding the Fed's planned renovation of its Eccles building head office in Washington, DC.

Dow Jones price forecast

The Dow Jones’ latest price pullback appears to have fizzled as bearish momentum struggles to find a foothold. The Dow is still struggling to find fresh ground above the 45,000 major handle, but price action is equally unwilling to explore chart territory below 44,000 for the time being. Immediate technical support is baked in at the 50-day Exponential Moving Average (EMA) near 43,250, with the 200-day EMA parked far below, just north of 42,000.

Dow Jones daily chart

(Click on image to enlarge)

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