Dow Jones Technical: Minor pull-back found support with bullish elements sighted in Caterpillar

Stocks

Summary:

The Dow Jones shows signs of short-term recovery after a minor pullback, supported by technical indicators and Caterpillar’s bullish setup ahead of earnings. Key support lies at 43,475.

Since the medium-term swing low on 7 April 2025, triggered by the US Liberation Day tariff announcement, the Dow Jones Industrial Average has underperformed compared to the S&P 500 and Nasdaq 100.

So far, the US Wall Street 30 CFD Index (a proxy of the Dow Jones Industrial Average futures) has not yet broken above its current all-time high of 45,100 printed in December 2024 after a retest of it last Monday, 28 July, versus fresh all-time highs seen on the S&P 500 and Nasdaq 100.

Caterpillar’s ex-post earnings price actions may drive Dow Jones

Let’s examine the Dow Jones Industrial Average from a technical analysis perspective within a short-term time horizon (1 to 3 days), coupled with an inter-market analysis of Caterpillar (CAT), the third biggest weightage component stock of the DJIA (6%) as its Q2 earnings release will be out on Tuesday, 5 August before the US market opens.

Dow Jones Technical: Minor pull-back found support with bullish elements sighted in Caterpillar_1

Fig. 1: US Wall Street 30 CFD Index minor trend as of 4 Aug 2025

Dow Jones Technical: Minor pull-back found support with bullish elements sighted in Caterpillar_2

Fig. 2: Caterpillar medium-term trend as of 4 Aug 2025

Preferred trend bias (1-3 days)

The five-day minor corrective decline of the US Wall Street 30 CFD Index since the 28 July high of 45,146 is likely to have reached an exhaustion zone after last Friday, 1 August’s intraday sell-off triggered by the weaker-than-expected US non-farm payroll print for July.

Bullish bias above 43,600/43,475 key short-term pivotal support and a clearance above 43,920 may reinforce a potential minor recovery towards the next intermediate resistances at 44,250/44,390 and 44,780 (see Fig. 1).

Key elements

The -4% minor corrective decline of the US Wall Street 30 CFD Index has stalled right at the 50-day moving average and the 50% Fibonacci retracement of prior bullish impulsive up move from 17 June 2025 low to 28 July 2025 high. Its confluence zone is defined as 43,600/43,475.

The hourly RSI momentum indicator has flashed out a bullish divergence condition at its oversold region on last Friday, 1 August, before a bullish breakout above a parallel descending trendline resistance seen in today’s Asia session. These observations suggest last Friday’s downside momentum has eased.

Caterpillar has also managed to hold right at its 20-day moving average support of 416.88, which confluences with the medium-term ascending channel support from the 7 April 2025 low. In addition, the daily Chaikin Money Flow Index (price momentum with volume) has managed to exhibit bullish momentum conditions above 0.21( a parallel support) (see Fig. 2).

Alternative trend bias (1 to 3 days)

Failure to hold at 43,475 invalidates the bullish scenario for an extension of the minor corrective decline towards the next supports at 43,170 and 42,860 (the key 200-day moving average and the medium-term ascending trendline from 23 May 2025 low).

Source: marketpulse

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Glendon

Economic

Political

President Donald Trump plans over the next several days to name replacements for two key vacancies, one to fill a spot on the Federal Reserve and other to replace the head of the Bureau of Labor Statistics.

Both spots opened up Friday — the Fed position through the surprise resignation of Governor Adriana Kugler, and the other from Trump's stunning decision to fire Erika McEntarfer, the commissioner at the Bureau of Labor Statistics.

Trump told reporters Sunday that he is thinking of several possible candidates for the Fed spot, and that he is set to replace McEntarfer soon.

"I have a couple of people in mind," Trump said regarding the Kugler vacancy. "I'll be announcing that probably over the next couple of days."

Kugler's Fed term expired next January, but she decided to exit ahead of time. In a letter submitted Friday to Trump, Kugler gave no reason for the move, which takes effect Aug. 8.

As a Fed governor, Kugler was a permanent voter on the Federal Open Market Committee, which sets the central bank's key funds level used as a peg for interest rates across the U.S. economy. In addition, governors help craft banking regulations.

During her short stint, which lasted less than two years, Kugler consistently aligned herself with the policies of Chair Jerome Powell, who has been on the receiving end of frequent Trump criticism.

Trump has stated that future Fed nominees will be litmus tested for whether they will vote to lower the funds rate.

The Kugler resignation "jump-starts the Trumpification of the Fed by handing President Trump a vacancy into which he can place a potential or even a clearly designated successor to Powell as Fed chair," Krishna Guha, head of global policy and central bank strategy at Evercore ISI, said in a note.

Potential successors include former Fed Governor Kevin Warsh, Treasury Secretary Scott Bessent and National Economic Council Director Kevin Hassett.

Controversy over jobs count

Trump sacked McEntarfer following Friday's disappointing nonfarm payrolls report. The BLS not only reported that the economy added just 73,000 jobs in July, but it also revised the prior two months' totals lower by 258,000.

In a Truth Social post Sunday, Trump alleged that McEntarfer was responsible for "the biggest miscalculations in over 50 years."

Revisions are common for monthly jobs numbers as the BLS receives more information through the survey of establishments it uses to calculate the nonfarm payrolls figure. However, as survey responses have declined over time, revisions have risen, with the BLS last year adjusting down its count for the 12-month period preceding March 2024 by 818,000.

McEntarfer's firing has drawn widespread criticism due to worries that the move could politicize the BLS statistics, which are used to set policy and as a barometer for multiple aspects of the economy.

"Potential politicization of the Fed has been much discussed over the past several months, but the risk of politicizing the data collection process should not be overlooked," wrote Michael Feroli, chief U.S. economist at JPMorgan Chase. "To borrow from the soft-landing analogy, having a flawed instrument panel can be just as dangerous as having an obediently partisan pilot."

Trump has not public discussed potential replacements for McEntarfer. Deputy Commissioner William Wiatrowski is serving in an acting role now.

Source: CNBC

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Adam

Economic

Stocks Slide as Weak Jobs Report Sparks Economic Worries

Markets pulled back sharply on Friday after a disappointing U.S. jobs report shifted investor focus away from trade tensions and toward a more pressing concern: whether the economy is actually strong enough to justify record-high stock prices.

For weeks, investors had treated tariff headlines as the main risk to markets. But with stocks climbing steadily despite escalating trade rhetoric, it’s now clear that tariffs were never the real driver. Friday’s reaction showed that investors may finally be waking up to a more fundamental risk—slowing economic growth.

Why Are Interest Rates Back in Focus?

The Labor Department reported just 73,000 jobs added in July, falling well short of forecasts for over 100,000. Even more concerning, previously reported gains in May and June were revised down by a combined 258,000. The weaker-than-expected numbers forced a reassessment of the job market’s true strength and raised doubts about the broader economy.

Stock indexes tumbled, with the Dow down 542 points (1.23%), the S&P 500 off 1.6%, and the Nasdaq losing 2.24%, marking the worst day in weeks for all three.

Bond markets moved swiftly in response, as investors bet the Federal Reserve would need to step in. The 10-year Treasury yield fell to 4.23%, its lowest in three months, while the 2-year yield dropped even more sharply.

Rate cut expectations surged—traders now see more than an 80% chance of a Fed cut in September, up from less than 40% the day before. Some analysts are even predicting a half-point cut rather than the standard quarter-point move. While lower rates could ease borrowing costs, they also signal growing anxiety about the economy’s direction.

Which Stocks Were Hit the Hardest?

Sector performance reinforced the shift in tone. Consumer and tech stocks—typically more sensitive to economic conditions—led the declines, falling 3.6% and 2.1% respectively.

On the flip side, utilities and other defensive sectors rose as investors looked for safer ground. The U.S. dollar also weakened by more than 1% against major currencies, reflecting the market’s view that interest rates are headed lower and making U.S. assets less attractive to global investors.

What Should Investors Watch Now?

More than just a reaction to weak data, Friday’s selloff revealed what had been hiding in plain sight: the market wasn’t rising in spite of tariffs—it was ignoring signs of a slowing economy.

With that blind spot exposed, investors may now place less weight on political noise and focus more closely on fundamentals.

Key indicators to watch in the coming weeks include inflation reports, consumer spending data, and any guidance from the Federal Reserve. As the focus shifts to economic health, portfolio positioning may need to follow.

Source: fxempire

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Warren Takunda

Economic

China–U.S. Trade War

US President Donald Trump doesn’t appear willing to ease the pressure on German carmakers. The US executive order on reciprocal tariffs published just before 1 August stopped short of applying the 15% tariffs agreed by Trump and Commission president Ursula von der Leyen to US imports of EU vehicles.

Since 2 April, EU cars have been hit with 25% US tariffs under the section 232 of the US Trade Expansion Act, which allows the US president to restrict imports of goods threatening US national security.

The deal concluded last Sunday with President Ursula von der Leyen was meant to apply the 15% tariffs to EU cars, and to exempt certain strategic products such as aircraft from tariffs, but neither proviso appears in the executive order.

The executive order imposes a blanket 15% tariff on EU goods to apply from 8 August. Goods already in transit before that date will enjoy the previous tariff rate of 10% until 5 October, the US order says. Any attempt to circumvent these tariffs will be penalized with a 40% duty on the goods concerned, the order adds.

Despite the apparent omissions from the order, EU Trade Commissioner Maroš Šefčovič welcomed “the first results of the EU–US deal".

“This reinforces stability for businesses as well as trust in the transatlantic economy,” he said on X, adding: “EU exporters now benefit from a more competitive position.”

Šefčovič also said, however, that “the work continues”, referring to ongoing negotiations on a joint statement intended to formalise the political trade agreement reached on July 27.

Diverging narratives

The Commission and the US administration are struggling to agree on a joint text, and up to now have pushed diverging narratives on the deal.

Uncertainty remains over the fate of steel and aluminium, currently hit by 50% US tariffs, which, according to the Commission, are expected to soon be subject to lower tariff-rate quotas. Negotiations are also ongoing over a series of exemptions, as pressure mounts from the EU wine and spirits industry.

In a factsheet published on Monday, the US also claimed that the EU committed not to apply telecommunications network usage fees in an upcoming Digital Network Act, which is currently being disputed between EU telecom companies and US tech giants in Brussels.

On Thursday the Commission noted that a white paper on digital networks published in February 2024 assessed that imposing a network fee was “not a viable solution”. “Such an exemption would not apply to US company only,” a Commission spokesperson said.

Source :Euronews

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Winkelmann

Cryptocurrency

Economic

As Bitcoin dipped beneath critical support near $114,000, the broader crypto market followed, triggering a cascade of red across major altcoins. At the same time total market capitalization dropped over 5% in just 48 hours, driven by leveraged liquidations, macro jitters, and declining trading volumes. The FOMC’s latest stance, combined with continued risk-off behavior in equities, has reignited fears of a deeper correction. But amid the panic, many investors are doing what they’ve always done in downcycles – scouting high-upside altcoins that offer meaningful gains from small initial positions.

Why Bitcoin’s Decline Matters Beyond the Headlines

BTC’s drop below $115,000 not only invalidated a key support band but also caused $180 million in liquidations across derivatives markets. Ethereum and Solana were hit hard, with ETH slipping below $3,600 and SOL unable to maintain $165. Sentiment has shifted quickly, with fear creeping back into the charts after weeks of cautious optimism. Traders are watching closely to see if the market can reclaim previous ranges – or if another leg down will send altcoins even lower. Yet in these moments, capital rotation often favors low-market-cap tokens that haven’t yet made major moves.

Why Volatile Markets Drive Altcoin Discovery

Market corrections tend to shift attention away from overbought majors and toward lesser-known assets with asymmetric upside. When sentiment turns cautious, many investors downsize their entry bets – but seek much higher return potential. This creates ideal conditions for smaller-cap projects with active communities, limited token float, and developing narratives. Just as tokens like SHIB and PEPE thrived in similar volatility phases in past cycles, this dip is once again inspiring a fresh wave of altcoin discovery .

Conclusion: Timing the Next Rebound With Strategic Entry

Whether the market retests deeper levels or begins to rebound from here, investors who prepare early tend to come out ahead.

Source: CryptoSlate

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Gerik

Economic

Market Stabilizes After Jobs Shock and Tariff Jolt

Wall Street futures rebounded in early Monday trading, with the Dow up 294 points (+0.67%), the S&P 500 up 43.5 points (+0.69%), and the Nasdaq 100 gaining 184.75 points (+0.81%). This stabilization follows Friday’s sharp selloff, the worst for the S&P 500 in over two months, triggered by a combination of softer-than-expected July job data and new tariffs on key U.S. trading partners.

The July jobs report not only fell below expectations but also included significant downward revisions to previous months, reinforcing the perception of a cooling labor market. This bolstered expectations for a Federal Reserve rate cut in September, with the CME FedWatch tool pricing in an 80% probability up sharply from 63.1% a week prior.

Fed Under Pressure as Political Tensions Mount

The Federal Reserve’s decision last week to hold rates steady has drawn renewed criticism from President Trump, who has long pressured the central bank to pursue a more aggressive easing path. The tension escalated with the unexpected resignation of Fed Governor Adriana Kugler on Friday. Analysts speculate that her successor soon to be nominated by Trump may be groomed for the Chair role once Jerome Powell’s term ends in May.

Kathleen Brooks of XTB remarked that the replacement could mark a significant shift in Fed leadership, potentially aligning more closely with the White House’s policy preferences.

New Tariffs Add to Market Uncertainty

Adding further pressure on equities, Trump signed an executive order last week introducing new tariffs on imports from Canada, Brazil, India, and Taiwan. These duties have dampened investor sentiment, particularly amid ongoing global trade negotiations. U.S. Trade Representative Jamieson Greer suggested on Sunday that the tariffs are unlikely to be rolled back in the near term, despite diplomatic efforts by affected countries.

The market is now digesting the dual effects of deteriorating macroeconomic indicators and rising geopolitical friction both of which could shape the Fed’s policy response in the coming months.

Earnings Remain a Bright Spot

Despite macro headwinds, corporate earnings continue to impress. According to LSEG I/B/E/S, 80.6% of the 330 S&P 500 companies that reported as of Friday have exceeded analyst estimates the highest beat rate since Q3 2023. This earnings strength may provide near-term support for equities even amid policy and geopolitical uncertainty.

Investors are watching this week’s earnings from Palantir, Eli Lilly, and Disney, which could offer fresh insights into sector resilience and consumer sentiment.

Key Data Ahead in a Light Week

Economic releases this week are limited. Monday will bring U.S. factory orders for June, while Tuesday’s business activity index and Thursday’s jobless claims will provide further clues about economic momentum. Atlanta Fed President Raphael Bostic’s upcoming speech may also offer guidance on the Fed’s next move.

Wall Street's rebound reflects optimism over potential rate relief amid softening labor data, but investors remain wary of structural risks tied to trade tensions and Fed leadership instability. As earnings continue to outperform, attention is now shifting to policy signals and forward guidance to determine if the rally can sustain or if volatility will return.

Source: Reuters

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Adam

Stocks

Asia Market Wrap - US Rate Cut Bets Boost Equities

Asian markets got a boost on Monday as hopes for lower interest rates eased worries about the US economy, though doubts about the long-term reliability of US policies lingered.

Wall Street dropped on Friday due to higher US unemployment and slower job growth, increasing hopes for a Fed rate cut to help the economy. While the weak data raised concerns about stock prices, it also strengthened belief that the Fed might step in to keep the recovery going after three months of rising stocks, fueled by confidence in the economy handling President Trump's tariffs.

The MSCI Asia-Pacific index (excluding Japan) rose 0.7%, helped by a 1.1% jump in South Korean stocks.

Japan's Nikkei dropped 1.4%, partly due to the yen strengthening on Friday, while Chinese blue-chip stocks stayed unchanged.

Upbeat US Earnings Season Continues

Wall Street is feeling positive thanks to strong earnings reports. So far, about two-thirds of S&P 500 companies have shared their results, and 63% have done better than expected. Earnings growth is now estimated at 9.8%, up from 5.8% in early July.

This week, companies like Disney, McDonald's, Caterpillar, and major pharmaceutical firms are set to report their results.

European Open - European Shares Higher

European stocks inched up on Monday, bouncing back slightly after Friday's big drop. The STOXX 600 index rose 0.2% by early morning, following its steepest fall in over three months.

Switzerland's SMI index dropped 1.5% as markets reopened after a long weekend. Swiss Business Minister Guy Parmelin said the country might revise its offer to the US after facing heavy tariffs last week, which experts warn could lead to a recession.

Swiss pharmaceutical giants Novartis and Roche fell 1.3% and 2.3%, respectively, after President Trump urged 17 major drug companies to lower US prescription prices. Swiss luxury brands Richemont and Swatch, heavily affected by tariffs, also dropped over 1.5% each.

UBS shares fell 2.5% after the bank agreed to pay $300 million to settle US cases over mortgage-linked investments.

On a positive note, Lloyds rose 6.3%, leading the STOXX 600, after the UK's Supreme Court overturned a ruling on motor finance commissions, benefiting banks.

On the FX front, The U.S. dollar gained some strength on Monday, rising 0.2% to 98.88 against a group of currencies after dropping over 1.3% on Friday. It was also up 0.3% against the yen, trading at 147.91, though still 3 yen below Friday's high.

The euro slipped 0.2% to $1.1561, while the British pound stayed mostly steady at $1.3276.

Currency Power Balance

In July, the dollar jumped 3.4%, its biggest monthly gain since April 2022, as markets grew more comfortable with Trump's trade policies and the economy stayed strong despite tariffs.

Gold continues to hold the high ground this morning as rate cut bets are likely underpinning the precious metal.

Oil prices slid as OPEC+ decided on Sunday to increase oil production by 547,000 barrels per day in September. This is part of ongoing efforts to boost output and regain market share amid worries about supply issues related to Russia.

This increase reverses OPEC+'s biggest production cuts earlier than planned and adds extra output for the UAE, totaling about 2.5 million barrels per day, or 2.4% of global demand.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, it is a quiet one.

The US session brings factory orders and core durable goods data. Both of which should not have a material impact on market moves. Developments around trade deals and updates around the firing of the head of the Bureau of Labor Statistics (BLS) may have a bigger impact on the US Dollar.