Dow Soars on Tesla Hype, But Powell Jitters Linger

The Dow Jones Industrial Average (DJIA) saw a strong rebound on Tuesday, climbing over 900 points—or roughly 2.49%—to move above the 39,000 mark. The rally came ahead of Tesla’s (TSLA) much-anticipated earnings report scheduled for later in the day. Despite the surge, investor sentiment remains uneasy due to ongoing tensions surrounding the White House’s critical stance on Federal Reserve Chair Jerome Powell.

The DJIA’s upward move comes as traders weigh strong corporate earnings expectations against fears about the Fed’s independence and uncertainty surrounding U.S. trade policies. The broader market mirrored the Dow’s performance, with the S&P 500 rising 2.1% and the Nasdaq Composite gaining 2.4%.

Former President Donald Trump has hinted that any economic slowdown would be the Fed’s fault if it fails to lower interest rates in response to his trade policies. According to Nick Timiraos of the Wall Street Journal, a well-known Federal Reserve analyst, Trump is prepared to place the blame for any downturn on the central bank if it doesn’t act quickly enough.

Investor concerns about trade instability and perceived threats to the Fed’s autonomy have triggered a move toward safe-haven assets. Gold prices soared to a historic high of $3,500, while demand for the U.S. dollar weakened, pushing the greenback to a three-year low below the 98.00 level on Monday.

However, the U.S. Dollar Index (DXY), which measures the dollar’s strength against six major currencies, has since bounced back. It currently sits at 98.56, marking a 0.25% gain after dipping to a low of 97.92.

U.S. Treasury Secretary Scott Bessent has indicated some progress in easing tensions with China, though he described the current situation as unsustainable, according to Bloomberg.

Meanwhile, market data shows that traders are pricing in around 91 basis points in Federal Reserve rate cuts by the end of 2025.

Outlook for the Dow Jones

While the broader downtrend in the DJIA remains intact, recent buying pressure has lifted the index above 39,200 following Bessent’s comments. For bullish momentum to continue, the index must break through resistance at 39,500. A move above that level could open the path to the 40,000 milestone.

On the flip side, if bearish sentiment prevails and the index falls below the 39,000 threshold, it could lead to a renewed selloff. The next key support levels lie at 38,500 and 38,000, with the year-to-date low of 36,614—hit on April 7—serving as a longer-term downside target.