Where we are: The Dow Jones cash index is currently trading at 51033, up 259 points on the day. Futures are a touch firmer at 51246, up 197 points, having traded in a range between 50999 and 51382. The index is building on Friday’s gains and continues to push higher, buoyed by strong tech sentiment.
What’s driving it: The primary driver remains strength in the tech sector. Nvidia’s announcement of its new RTX Spark Superchip has injected further momentum into the market. Rising US yields are also supporting gains, though modestly, with the 10-year at 4.450%.
- Powell’s acceptance speech at the John F. Kennedy Library Foundation earlier provided a backdrop of steady confidence regarding future economic resilience.
- Net non-commercial positioning in Dow futures is moderately short, at -9,324 contracts.
- The VIX remains subdued at 15.74, indicating continued risk-on sentiment.
NY session focus: All eyes will be on the 10:00 ET release of the ISM Manufacturing PMI, forecast at 53.3, and ISM Manufacturing Prices, forecast at 85.3. Watch for a break above the intraday high of 51382 in the Dow futures to confirm bullish momentum. A failure to sustain gains above 51000 could signal a near-term pullback. Later, at 20:30 ET, traders will digest any market-relevant comments from FOMC Member Powell. The trade that’s working is buying the dip on tech names. The trade at risk is shorting tech into continued positive news flow. The pain trade is a sharp reversal driven by hotter-than-expected inflation figures in the ISM Manufacturing Prices.