Dow Jones & Nasdaq 100: Iran Tensions Cap Gains
Later in Thursday’s session, US jobless claims will influence risk appetite. Economists expect initial jobless claims to fall from 227k (week ending February 7) to 225k (week ending February 14). Downward trends in claims would indicate a resilient US labor market, supporting a more hawkish Fed rate path. Delays to rate cuts would leave borrowing costs elevated, affecting corporate profits and stock valuations.
Beyond the data, traders should closely monitor FOMC members’ speeches following Wednesday’s FOMC Minutes. Growing support for a June rate cut after softer US inflation would boost demand for risk assets. For context, Committee members supported a rate cut if inflation cooled. At the time, Committee members only had access to December’s CPI Report. In January, headline US inflation fell from 2.7% to 2.4%, while core inflation eased from 2.6% to 2.5%.
According to the CME FedWatch Tool, the probability of a June Fed cut increased from 58.6% on February 11 to 61.2% on February 18 because of softer inflation numbers. Currently, markets expect two Fed rate cuts in 2026, with a year-end target rate of 3.00% -3.25%.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
Despite the morning gains, the Nasdaq 100 E-mini and the S&P 500 E-mini remained below their 50-day EMAs, while holding above their 200-day EMAs. The EMA positions signaled a bearish near-term but bullish longer-term outlook. Meanwhile, the Dow Jones E-mini traded above its 50-day and 200-day EMAs, indicating a bullish bias that aligns with favorable fundamentals.
Near-term trends will hinge on US economic data, central bank rhetoric, and Middle East developments. Key levels to monitor include:
Dow Jones
- Resistance: 50,000, the February 10 record high of 50,611, and then 51,000.
- Support: the 50-day EMA (49,061), and then 48,500.