Dow Jones (DJ30) cools off all-time highs as US government shutdown rumbles on - Potential targets and price forecast

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Cooling from all-time highs, the Dow Jones (DJ30) trades 0.33% lower in today’s session, at around $46,594.

Having found support early August, US equities have staged a formidable rally since, despite a somewhat questionable cocktail of macroeconomic themes.

As always, let’s review some macro themes impacting US equity markets, and importantly, consider some potential price targets for this week’s trading.

Dow Jones (DJ30): Key takeaways 07/10/2025

• Staging an impressive rally despite a dubious fundamental outlook, the Dow Jones is retracing from all-time highs in today’s trading, with Caterpillar (CAT), Nike (NKE), and Salesforce (CRM) amongst the worst-performing constituents
• Despite some downside in today’s session, sentiment on US equities remains generally positive, with complications to Fed monetary policy brought about by the US government shutdown positive for equity markets, somewhat counterintuitively
• Otherwise, political uncertainty in major world economies, most notably Japan and France, is encouraging risk-averse investors to seek alternative forms of investment, somewhat benefiting US equities

Read more of today’s MarketPulse coverage: RBNZ Preview: Why a 50bps Cut is on the Table

Dow Jones 30 (US30USD), S&P 500 (SPX500USD) and Nasdaq-100 (NAS100USD) YTD, OANDA, TradingView, 07/10/2025

Dow Jones 30 retraces from all-time highs, snapping a six-day bullish streak

Despite the best efforts of ballooning sovereign debt, an ongoing government shutdown, and stock valuations rivalling the .com bubble, US equities remain at the highs

While the hive mind of the market is not typically known for its ultimate rationality in decision-making, the recent rally in US equity prices, including the Dow Jones, cannot be ignored.

Although prices have cooled somewhat, seemingly due to technical selling, all three major US indices, the Dow Jones 30, S&P 500, and Nasdaq-100, have recently posted all-time highs.

Let’s take a look at the major fundamental themes at play this week:

US government shutdown: As a precursor to the following theme, the US government shutdown should, at least in a vacuum, spell trouble for the current rally in equity pricing. Adding to market uncertainty, undermining confidence in the US government, and suspending non-essential government services, none of these outcomes would typically be viewed as a reason to hold US equities over an alternative.

S&P 500 historical price-to-earnings (P/E) ratio, Macrotrends, 07/10/2025

Fair to say, however, this has not been the case since Tuesday’s shutdown announcement, with prices renewing all-time highs since.

Market conviction on Federal Reserve easing path: While the notion that the Federal Reserve is becoming increasingly dovish is a pre-existing narrative, one of the many knock-on effects of the US government shutdown is further complications to Fed monetary policy.

CME FedWatch, 06/10/2025

Nailing their colours to the mast in 2025 and committing to following objective data when making rate decisions, the current government shutdown has suspended all collection and reporting of economic data by federal agencies, putting the Federal Reserve in a difficult position.

Naturally, it’s challenging to balance the dual mandate of stable pricing and employment when the most recent figures, particularly regarding their reaction to September’s 25-basis-point cut, are entirely unknown.

Ultimately, markets are predicting that a lack of economic data will force the Fed’s hand into performing a second back-to-back interest rate cut, especially considering that September’s NFP report left much to be desired, an outcome Fed Chair Powell will be keen to avoid repeating.

This holds true especially when considering that ADP payrolls, serving as our most recent and reliable private sector gauge of the US labor market, painted a less-than-stellar picture, losing 32,000 jobs in September.

As for US equities, we can consider any suggestion that rates will be lowered in upcoming decisions as positive for pricing, adding some rationale to recent upside.

Rising political uncertainty in major economies: As a brief aside, the change of leadership in Japan and the recent resignation of the French prime minister are contributing to global political uncertainty.

While I’m hesitant to say the United States equity market has entirely maintained its prestige as a global safe haven in recent memory, we can expect substantial political changes in key world economies to inspire risk-averse investors to seek alternative forms of investment, offering a minor boost to US equity pricing.

Dow Jones 30 (US30USD), Nikkei 225 (JP225USD) and CAC 40 (FR40EUR), OANDA, TradingView, 07/10/2025

Dow Jones 30 (DJ30): Technical Analysis 07/10/2025

Let’s now direct our focus to market technicals, starting with the daily, and then concluding with the four-hourly.

Dow Jones 30 (DJ30): Daily (D1) chart analysis (07/10/2025):

Dow Jones 30 (US30USD) D1, OANDA, TradingView, 07/10/2025

With a crossover of the 9 and 21-period moving averages marking the start of the current uptrend, the Dow Jones trades are almost 4.00% higher since.

While the price trades above the current trend line, we are approaching the upper limits of the 20-period Bollinger band, which, so far, correctly suggested that the price needs to retrace towards the baseline before a move higher.

From a technical perspective, if support can be maintained at $46,650, further upside can be expected in the near term.

Price targets and support/resistance levels:

• Price target 1: 78.6% Fib: $47,100
• Support 1: Previous high: $46,450
• Support 2: Consolidation: $45,642

Dow Jones 30 (DJ30): Four-hourly (H4) chart analysis (07/10/2025):

Dow Jones 30 (US30USD) H4, OANDA, TradingView, 07/10/2025

For those with a passion for technical analysis, the H4 Dow Jones chart is a textbook example of a stairstep pattern, providing those with a keen eye plenty of opportunity to get long.

Price targets and support/resistance levels:

• Price target 1: All-time high: $47,102
• Support 1: Previous swing high: $46,508
• Support 2: Bottom of consolidation: $46,157

At current, price looks for support at the trendline, but may slide lower to the lower limit of the 20-period Bollinger band if support can not be found.

To the upside, a clear target would be the previous high of $47,102, although some may view $47,000 as a logical exit point.

Read more from MarketPulse: Risk-off session: What's going on in markets?

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