- Despite rising recession fears and declining US consumer confidence, the Dow Jones Industrial Average is experiencing gains.
- US consumer confidence has fallen for the fourth consecutive month.
- Key Technical Levels Identified for Dow Jones.
US Equity markets continued their advance today as investors evaluated the impact of upcoming reciprocal tariffs following U.S. President Donald Trump’s hint at possibly softening his trade policy.
Dow Jones Heatmap
Source: TradingView
President Trump stated that not all planned tariffs would start on April 2nd, with some countries potentially being exempt. However, new tariffs on autos, pharmaceuticals, and a 25% tariff on Venezuelan crude were mentioned.
Meanwhile, Fed Governor Kugler said monetary policy is still tight but noted slower progress toward the 2% inflation goal since last summer, calling the recent rise in goods inflation “unhelpful.”
US Data Ramps Up Recession Fears
Lackluster US data failed to dent market optimism proving once more that at present, Tariff chatter is the dominant force driving market moves.
U.S. consumer sentiment continued to drop in March, with the Conference Board’s Consumer Confidence Index falling from 98.3 to 92.9, the lowest level since February 2021.
The print is worse than the July 2022 print which was the nadir of the Biden Presidency when inflation was at 9%. It is the fourth monthly decline in a row.
The consumer expectations index based on consumers’ short-term outlook for income, business, and labor market conditions recorded its lowest reading in 12 years.
Source: Macrobond, Conference Board
In March, consumers’ expectations for inflation over the next year increased, according to the Conference Board survey. These expectations had been falling last year but have gone up for three months in a row now.
As US data continues to underwhelm recession fears are only likely to grow. Today’s report showed that opinions on current business conditions are now almost neutral, while consumers have become more negative about the future, with growing pessimism about upcoming business conditions.
Is this the pain President Trump was referring to and will it lead to a recession? For now US Equity markets are on the rise but i expect market concern to grow especially if US data continues to underwhelm moving forward.
Technical Analysis – Dow Jones (DJIA)
Looking at Dow Jones from a technical standpoint, we had a gap higher over the weekend before the index enjoyed a bullish start to the week yesterday with gains of 1.36%.
Price is currently testing a key resistance level at 42764 with a break above opening up a test of resistance at 43402.
A positive for bulls is that the 14-period RSI has crossed above the 50 handle which is a sign that momentum may be shifting.
Also supporting a bullish narrative is that US stocks have historically exhibited positive performance trends during the final two weeks of March since 1950.
If history repeats itself the Dow Jones could be set for further gains or at the least hold onto most of its recent gains since bottoming out on March 13 at 40665.
Dow Jones Daily Chart, March 25, 2025
Source: TradingView
Support
- 42446
- 41950
- 41400
Resistance
- 42764
- 43402
- 44451
