The Dow Jones Index Futures rose and is nearing the all-time high as investors waited for key earnings from its constituent companies, the Federal Reserve interest rate decision, and the potential government shutdown. It rose to $49,412, a few points below the all-time high of $49,630.
Dow Jones Index waits for key corporate earnings
The Dow Jones Index is hovering near its all-time high as top constituent companies release their fourth-quarter and full-year financial results.
UnitedHealth, a major insurance company, will be the first one to publish its numbers on Tuesday before the market opens. Its numbers come a day after its stock dropped sharply after the Trump administration proposed nearly flat rates for Medicare Advantage.
The new proposal entails a 0.09% net average payment increase for Medicare Advantage plans for 2027, which is much lower than what analysts were expecting. Wall Street was expecting the increase to be between 4% and 6%.
Boeing will also publish its financial results during the market. Other key companies that will publish their numbers on Monday will be RTX, NextEra, Union Pacific, and Northrop Grumman.
The most important Dow Jones constituent companies to publish their results this week are Microsoft, IBM, and Apple. These three companies are major players in the booming artificial intelligence (AI) industry.
More non-Dow Jones Index companies that will be Tesla, Lam Research, GE Vernova, Starbucks, Waste Management, and General Dynamics.
Federal Reserve interest rate decision
The other main catalyst for the Dow Jones Index is the upcoming Federal Reserve interest rate decision. Historically, the first rate decision of the year is important as it sets the tone for what to expect during the year.
Experts and traders on Polymarket believe that the bank will leave interest rates unchanged between 3.50% and 3.75%. Recent data showed that the US economy is doing well, with the GDP expanding by 4.4% in the third quarter.
The labor market has started to improve, while inflation has remained near the bank’s 2% target. A dovish tone will likely boost the Dow Jones and other US indices.
US government shutdown
Meanwhile, data compiled by Polymarket shows that odds of a government shutdown have jumped in the past few days. These odds have risen to 80% from 78 per cent during the weekend.
Government shutdown odds | Source: Polymarket
Odds of a government shutdown have jumped because of the recent killings by ICE and the Border Patrol. Democrats have insisted that they will only provide votes to fund the government if it has provisions to reform ICE and other security agencies.
In theory, a government shutdown should be bearish for American equities. However, historically, the stock market has done well when there is a shutdown because they always end.
Trade concerns remain, but TACO provides hope
Meanwhile, market participants are concerned about trade issues. In a statement, Donald Trump threatened to impose a 25% tariff on goods coming from Canada if it inks a trade deal with China.
Canada has rejected these claims and noted that it only struck a limited deal with China. It reduced its tariffs on electric vehicles from China, while China reduced levies for its canola product.
The US also threatened a 25% tariff on goods from South Korea after the delayed ratification of the deal made last year.
On the positive side, there is a concept known as TACO, which means that Trump always chickens out from his big threats. Analysts believe that he will likely not implement these tariffs.
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