Dow Jones Industrial Average opens with gains after strong US employment data

• Dow Jones trims losses following upbeat US employment data. 
• A moderate slowdown in the yearly wage growth has eased investors’ concerns about the strong employment reading. 
• The sharp reversal in the weekly chart suggests that a deeper correction might be in progress.

The Dow Jones Industrial Average (DJIA) traded higher in Friday’s morning session, following upbeat US employment figures. The index, however, is on track for its worst week in the last year as the strong US economic data has put the Federal Reserve’s (Fed) easing plans into question.

Net employment increased in March by 303K, following a 270,000 increment in February and beating expectations of about a 200K rise. Wage figures revealed that salaries keep rising although the moderation in the annual rate seems to have eased investors’ concerns.

On Thursday, Minneapolis Fed President Neel Kashkari suggested that with inflation steady at high levels the bank might refrain from cutting rates this year, which sent equity markets tumbling. 

The main Wall Street indices are all positive on Friday. The NASDAQ is leading with a 1.38% advance to 16,271, followed by the S&P 500, up 1.17% at 5,207, and the Dow Jones, which adds 0.9% to 38,943.

Dow Jones news

All sectors are posting gains with Communication Services leading thanks to a 1.94% advance, followed by the Technology sector with a 1.64% gain. Industrials has gained 1.41%. The Utilities sector is the worst performer with a 0.31% advance.

Amazon (AMZN) is leading gains on Friday with a 3.17% rally to $185.66, followed by Salesforce (CRM), which advances 2.57% to $301.68. On the losing end, Intel (INTC) drops 2.16% to $38.87, still weighed down by the hefty losses reported for 2023. Next is McDonald’s (MCD) with a 0.86% decline to $267.777.

Dow Jones technical outlook

The index is trimming some losses on Friday, but the sharp reversal printed in the previous four trading days is forming a bearish engulfing candle on the weekly chart.

This formation often anticipates a major reversal. Price action has found demand above 38,500 to bounce up, but buyers might be challenged at the 39,265 resistance, which closes the path to the 40,000 top.

On the downside, a break of the 34,452 level would confirm a trend reversal and increase bearish pressure toward 38,035.
 

Dow Jones 4-Hour Chart