Where we are: Dow futures are currently trading at 50893, down 179 points or 0.35% on the day. The overnight range has been relatively contained between 50871 and 51083. This puts the Dow futures below yesterday’s cash close of 51079, suggesting a slightly weaker open for the New York session. The cash index is trading above the intra-day low of 50767, suggesting this may be initial support.
What’s driving it: The Dow is seeing some pullback following a strong run, with profit-taking likely in play ahead of potentially volatile economic data. We see a risk of downside surprise in this morning’s JOLTS data and think this may cause a risk-off move. Despite generally positive sentiment in Asia, where the Nikkei gained 0.16%, the mixed picture in Europe is a negative sign. A moderately short speculator positioning for the Dow, -9,324 contracts net, presents a squeeze risk if the market turns higher, but that feels remote right now.
- US 10Y yields are slightly lower at 4.432%, indicating some risk aversion.
- The DXY is also slightly lower at 99.05, providing limited support to the index.
- Nvidia’s move into the PC chip market is weighing on sentiment in other tech stocks like AMD and Intel, even as the Nasdaq remains buoyant.
NY session focus: Keep an eye on the 10:00 ET release of the JOLTS Job Openings figure, as a deviation from the forecast of 6.87M could trigger a significant market reaction. We are watching the 50767 cash level as a key support — a break below that could open the door for further downside towards 50500. The trade that has been working recently is long tech, but that feels stretched and vulnerable, especially if broader sentiment sours. The pain trade for the Dow would be a strong upside surprise in JOLTS, triggering a short squeeze that sends the index back above 51,000 quickly.