Dow Jones & Nasdaq 100: US Futures Slip as Yen Surge Hits Asia

Prime Minister Carney Cools Fears of a US-Canada Trade War

Over the weekend, US President Trump threatened Canada with a 100% tariff if Prime Minister Mark Carney signed a trade deal with China. The risk of a US-Canada trade war increased demand for safe-haven assets, leaving US stock futures in the red. Notably, gold broke above $5,000 for the first time.

Despite concerns over a US-Canada trade war, Canadian Prime Minister Mark Carney downplayed speculation about a Canada-China trade deal. The Kobeissi Letter reported:

“Canada’s Prime Minister Carney says he does NOT plan to sign a ‘free trade agreement’ with China after President Trump threatened 100% tariffs.”

Easing risks of a US-Canada trade war cushioned the downside this morning, with US index futures rebounding from heavier losses.

Rising geopolitical tensions and increased risks of a US-Canada trade war collided with expectations of a lengthy US government shutdown. According to Polymarket, the chances of another US government shutdown increased to 78% over the weekend, up sharply from just 9% on January 23. Notably, US stock futures advanced during and beyond the 2025 shutdown.

US Durable Goods Orders and Earnings in Focus

US futures were under selling pressure in the Asian morning session on January 26. The Dow Jones E-mini and the Nasdaq 100 E-mini fell 119 points and 89 points, respectively, while the S&P 500 E-mini declined 16 points.

Later Monday, US durable goods orders will influence speculation about a June Fed rate cut. Economists expected durable goods orders to increase 0.5% month-on-month in November after sliding 2.2% in October. A rebound in orders would align with the recent pickup in economic momentum, lifting demand for US stock futures.

Other economic data on Monday includes the Dallas Fed Manufacturing Index and the Chicago Fed National Activity Index. However, durable goods orders will likely be the key driver.

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

Despite the morning losses, the Dow Jones E-mini, the Nasdaq 100 E-mini, and the S&P 500 E-mini remained above their 50-day and 200-day EMAs. The EMAs indicated a bullish bias, aligning with favorable fundamentals.

Near-term trends will hinge on geopolitical developments, USD/JPY trends, earnings, and US economic indicators. 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 (48,488).