Dow Jones Forecast: DJIA extends losses after hotter core PCE inflation

US futures

Dow future -0.10% at 42250

S&P futures -0.13% at 5680

Nasdaq futures -0.25% at 19760

In Europe

FTSE 0.15% at 8671

Dax -0.42% at 22574

Stocks extend yesterday’s losses & gold hits a record high
US core PCE rises TO 2.8% from 2.5%
Trade tariff worries ahead of “Liberation Day”
Oil rises for a third straight week

Trade jitters & hotter inflation weigh on stocks

US stocks have opened lower on Friday, following key inflation data and amid a fragile market mood ahead of next week's trade tariff announcements.

The US core PCE, the Fed's preferred gauge for inflation, rose in February, and household demand was weaker than expected amid growing concerns about household finances.

Core PCE rose 2.8% year on year up from 2.5%. On a monthly basis, core PCE rose 0.4% ahead of the 0.3% expected. Meanwhile, consumer spending rose just 0.1% after falling in January by the most in four years.

The data points to hotter inflation just as President Trump is planning trade tariffs, which could stoke prices higher. The market continues to price in two rate cuts this year, with the next one coming in July.

The Fed's recent forecasts underscored concerns about higher inflation and slower growth resulting from aggressive trade policies. However, keeping rates on hold in the near term means policymakers will have a better sense of Trump's tariffs and their potential impact on the economy, especially after next week's Liberation Day on April 2.

Growing uncertainties surrounding Trump's trade policies on the impact on the global economy has boosted safe haven demand, further lifting gold to yet another record high as it heads towards 3100.

Corporate news

Lululemon is falling 11% after the sportswear maker gave a downbeat annual forecast as the apparel space battles uneven consumer demand.

General Motors is extending its losses further after a 7% decline in the previous session, while forward is also under pressure as investors continue to react to the Trump administration's tariff on auto imports.

Apple and Meta after the Financial Times reported that the European Union is expected to impose minimal fines on the tech giants under the Digital Markets Act next week to avoid worsening tensions with Trump.

Dow Jones forecast – technical analysis.

The recovery from 40,660, the 2025 low ran into resistance at 42,830, the falling trendline and November low, before correcting lower. The price is testing the 200 SMA support at 42,250. Sellers, supported by the RSI below 50 will need to take out this key support to resume the bearish trend towards 41,700, the January low, and on to 40,700. However, should the 200 SMA hold, buyers could look to rise towards 42,830, the weekly high. A rise above here creates a higher high, extending the recovery towards the 50 SMA at 43,500.

FX markets – USD falls, GBP/USD falls

The USD is rising after hotter-than-expected US inflation; however, the mood remains cautious ahead of next week's tariff announcements, which is preventing big moves in the FX market. DXY is set to rise 0.28% this week.

The EUR/USD is falling amid trade tariff jitters following President Trump's announcement earlier in the week of 25% tariffs on auto imports into the US and ahead of next week's tariff announcement. The pair is expected to decline by 0.3% this week.

The GBP/USD is flat after stronger-than-expected UK retail sales data. Sales rose 1%, defying expectations of 0.4% contraction, but were down slightly from 1.4% in January. UK Q4 GDP was 0.1% growth. GBP/USD is set to rise 0.25% this week.

Oil rises for a third week

Oil prices are rising for the third consecutive week as the US raises supply concerns, ramping up pressure on Venezuela and Iran. However, concerns over tariffs on the demand side of the market could limit gains.

Both oil contracts are up around 2.5% this week and up around 7% since their multi-month lows in early March. The increases come as Trump announced 25% tariffs on potential buyers of Venezuelan crude oil, days after halting Chinese imports from Iran. This ultimately leads to a tighter supply market.

Meanwhile, there are lingering concerns that trade tariffs could hurt the US economic outlook, which would impact the demand outlook in the world's largest oil consumer.

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