Dow Jones & Nasdaq 100 Dip as Yen Carry Trades Hold, Earnings in Focus

US Labor Market Data, the Fed, and Earnings in Focus

US futures fell during the Asian morning session on January 15. The Nasdaq 100 E-mini and the S&P 500 E-mini dropped 37 points and 8 points, respectively, while the Dow Jones E-mini declined 55 points.

Later Thursday, US jobless claims data will influence the Fed rate path. Economists expect initial jobless claims to increase from 208k in the week ending January 3 to 215k in the week ending January 10. A larger-than-expected increase in jobless claims would revive hopes for a March Fed rate cut, boosting demand for US equity futures.

Crucially, a more dovish Fed rate path would have a greater influence on US risk assets than the BoJ’s policy stance and a yen carry trade unwind. Typically, lower borrowing costs would raise earnings and equity valuations. Traders should also closely monitor Fed speeches for their views on the timing of rate cuts.

According to the CME FedWatch Tool, the chances of a March Fed rate cut have fallen from 43.2% on January 7 to 27.2% on January 15. Robust labor market data sank bets on a Q1 rate cut.

The current dynamics, including market optimism over AI-related corporate earnings and expectations for an H1 2026 Fed rate cut, support a cautiously bullish near-term and positive medium-term price outlook. However, corporate earnings will be key for the near-term projection. Morgan Stanley, Goldman Sachs, and BlackRock are set to release earnings today.

Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500

Despite the extended losses, the Dow Jones E-mini, the Nasdaq 100 E-mini, and the S&P 500 E-mini traded above their 50-day and 200-day EMAs. The EMAs indicated bullish momentum, aligning with positive fundamentals.

Near-term trends will hinge on corporate earnings, US economic indicators, and Fed rhetoric. Key levels to monitor include:

Dow Jones

• Resistance: the January 13 record high of 49,901, and then 50,000.
• Support: 49,000 followed by the 50-day EMA (48,271).