Dow Jones (DJIA) Forecast: Eyeing new all-time high as banks’ earnings loom

[Ben Graham]

Key takeaways

Rotation favours DJIA: Sector rotation since late December has driven the Dow Jones and Russell 2000 to outperform the S&P 500 and Nasdaq 100, reinforcing near-term relative strength in the DJIA.

Bank earnings are the catalyst: With financials sector making up around 28% of the DJIA and heavyweights like Goldman Sachs and JPMorgan reporting, Q4 bank earnings could amplify volatility and act as the next directional trigger.

Bullish technical structure intact: The US Wall Street 30 CFD index remains in a rising channel above key moving averages, with momentum improving; a break above the current all-time high opens the door to further upside, while 49,250/49,096 is the key support to defend.

Since late December 2025, a clear sector rotation has taken hold in the US equity market, with former laggards—the Dow Jones Industrial Average and small-cap Russell 2000 outperforming AI-heavy mega-cap technology stocks that dominate the Nasdaq 100 and S&P 500.

Year-to-date as of 12 January 2026, the Russell 2000 and Dow Jones Industrial Average have gained 6.2% and 3.2% respectively, decisively outpacing the S&P 500 (+1.9%) and Nasdaq 100 (+2.1%) (see Fig. 1).

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Fig. 1: YTD performance of major global stock indices as of 12 Jan 2026 (Source: MacroMicro)

Key US financials’ earnings are the current key drivers for the DJIA

This week, several major US financial institutions will report their Q4 2025 earnings results: JPMorgan (Tuesday, January 13), Bank of America, Citigroup, and Wells Fargo (Wednesday, January 14), and Morgan Stanley, Goldman Sachs, and BlackRock (Thursday, January 15).

The US financial sector, with a weightage of around 28%, is the largest weighted component in the Dow Jones Industrial Average (DJIA).

In addition, the top price-weighted component stock in the DJIA is Goldman Sachs, with a weight of around 11.8%, and another major US financial institution, JPMorgan, ranks in the 10th spot in the DJIA with a weight of 4%.

Hence, the earnings release of the aforementioned US financial institutions may trigger a more volatile movement in the Dow Jones Industrial Average for this week.

Let’s now dissect the movement of the US Wall Street 30 CFD index (a proxy of the Dow Jones Industrial Average futures) from a technical analysis perspective.

Evolving into an accelerating bullish trend

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Fig. 2: US Wall Street 30 CFD index minor trend as of 13 Jan 2026 (Source: TradingView)

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Fig. 2: Ratios of S&P Financials & S&P Banks ETFs over S&P 500 ETF as of 12 Jan 2026 (Source: TradingView)

The price actions of the US Wall Street 30 CFD index have evolved into a steeper minor ascending channel after it hit a low of 47,875 on 2 January 2026, and it continues to trade above its 20-day and 50-day moving averages at the time of writing (see Fig. 2).

In conjunction, the hourly RSI momentum indicator has staged a bullish breakout on Monday, 12 January 2026, above a parallel descending trendline resistance, and has not reached an extreme overbought condition.

These observations suggest that the US Wall Street 30 CFD index is likely in the process of transitioning into a potential bullish acceleration sequence within its medium-term uptrend phase that has remained intact since the 23 May 2025 low.

Tthe ratio charts of the S&P Financials exchange-traded fund (ETF) and the SPDR S&P Bank ETF over the S&P 500 ETF have traded above their respective 50-day moving averages decisively in November and December, which suggests a potential medium-term outperformance of US banks (see Fig. 3).

Watch the 49,250/49,096 key short-term pivotal support, and a clearance above 49,606 (current all-time high area) sees the next intermediate resistances coming in at 49,805/49,840 and 50,265/50,335 (upper boundary of the minor ascending channel and Fibonacci extension).

However, failure to hold at 49,250/49,096 negates the bullish tone for another round of minor corrective decline to expose the next intermediate supports at 48,870/48,770 (close to the 20-day moving average), and 48,480.

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