Dow Jones futures rise following 380pt decline on Monday

We examine the DJIA’s movements overnight, as well as where futures markets suggest the US benchmark will open on Tuesday, 5 January 2021.

US equity markets retreat, Dow futures trade higher

The Dow Jones Industrial Average (DJIA) started out the New Year lower, finishing out Monday's session down 382 points or 1.25%, at the 30,223 point level.

On a more granular level, Walgreens Boots Alliance, Walmart and Goldman Sachs were the best performing equities; while Merck, Amgen and IBM were the worst performing.

In relative terms, the DJIA did however prove to be the best performing key benchmark overnight – with the broad based S&P 500 pulling back 1.48% while the Nasdaq declined 1.50%.

Commenting on these market movements, IG Market Analyst Kyle Rodda, speculated:

‘There’s probably a highly technical element to last night’s pullback in US equities: the argument has long been that after an extraordinary end to 2020, fuelled as much by hope and momentum than by improvements in the macroeconomic outlook, stocks might be due for a drop as portfolio managers bank profits and reposition for the new year.’

‘Even still, the drop in US stocks possessed conviction. Although the S&P500 finished well off its intraday lows, breadth was paltry at 15 per cent, while volumes were remarkably high for the first trading session of January,’ Mr Rodda added.

Despite that weakness overnight, futures markets suggested that US equity markets would open slightly higher on Tuesday – with Dow Jones futures trading 50 points higher, at the time of writing.

A volatile backdrop

All of this comes as coronavirus cases continue to increase – both in the US and on a global scale. Overnight, the world recorded 521 thousand new cases of the virus, with the US continuing to lead the way in terms of case counts, adding 181 thousand new cases overnight.

How has all of this impacted other asset classes? Gold, as Mr Rodda notes, rose strongly overnight as the Greenback (USD) retreated. On this front, Mr Rodda in a note to clients added:

‘US 10 Year Breakevens climbed above 2 per cent for the first time since late-2018 last night, pushing real yields towards record lows. The dynamic catalysed a break-out in the price of gold of its downward trend channel, as the yellow metal now eyes resistance around $US1965.’

On the other end of the asset spectrum – Bitcoin (BTC), which as again risen to prominence in the last week – traded with extreme levels of volatility overnight: Hitting a 24-hour low-high range of US$28,722.76- 33,440.22.

As investors flee more traditional markets, Bitcoin – maybe the world’s most well-known alternative asset has again soared in value and popularity – rising ~21% in the last 7 days.

Trade after-market moves with IG

Trading pre- and post-market enables you to take a position on key US shares – like Tesla, Apple, Amazon and Netflix – outside normal trading hours.

To start taking advantage of pre- and post-market trading, create an IG Trading Account.

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.