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The Dow Jones Industrial Average traded at 49,407.66 as of writing, rising 1.05% after a powerful 515-point surge to start February. The move marked one of the strongest sessions of the year and followed improved US manufacturing data that shifted market momentum. Futures pointed higher Tuesday morning, signaling follow-through buying.
Dow futures climbed 0.1%, while traders built on Monday’s broad-based rally. Could this momentum carry deeper into the month?
Futures Signal Continued Risk Appetite
US stock futures edged higher ahead of the opening bell. S&P 500 futures rose 0.3%, while Nasdaq 100 futures advanced 0.6%. The gains followed Monday’s advance across all major indexes.
The S&P 500 closed up 0.54%, finishing just below its all-time high, while the Nasdaq added 0.6%. Investors moved away from defensive positioning and returned to opportunity-driven trades as confidence improved.
Manufacturing Data Shifts the Narrative
Fresh manufacturing data fueled the rally. The ISM Manufacturing PMI jumped to 52.6 in January from 47.9 in December, marking the first expansion in 12 months and the strongest reading since August 2022.
Source: X
New orders and production rebounded sharply, signaling renewed activity across factories. Treasury yields reacted immediately, with the 10-year yield rising to 4.276%. Markets interpreted higher yields as confirmation of firmer growth rather than a policy threat.
Cyclicals and Tech Lead the Charge
Equity gains showed clear leadership. Apple surged 4%, lifting the Dow through sheer index weight. Caterpillar also outperformed, reflecting renewed interest in cyclical stocks tied to economic acceleration.
In the S&P 500, memory and storage stocks such as SanDisk, Seagate, and Western Digital posted strong gains as investors rotated toward hardware linked to AI and data demand. Oracle initially rose after unveiling a $50 billion AI funding plan before paring gains late in the session.
Macro Risks Take a Back Seat
Markets largely ignored political disruptions. A partial government shutdown could delay Friday’s jobs report, yet traders brushed aside the data gap. President Trump’s announcement of reduced tariffs on India also drew a limited reaction. Instead, attention stayed fixed on growth signals.
Manufacturing often leads broader economic trends. When factories pick up, recessions tend to fade from the conversation. That logic guided Monday’s buying.
Other Markets Reflect Shifting Flows
Elsewhere, gold closed its third straight losing session near $4,400 per ounce as profit-taking followed a sharp rally. Investors raised cash across asset classes after recent volatility. Bitcoin rebounded from recent lows around $74,500, suggesting dip-buying demand has returned after the prior sell-off.
Crypto still trades lower on the year, yet short-term stabilization caught traders' attention.
Long-Term Outlook Gains Attention
A longer-term narrative also resurfaced. Historical data suggests the Dow Jones often rallies sharply from cycle lows. According to market historian Jeff Hirsch, the index has averaged gains near 50% from yearly lows to highs in subsequent periods. The Almanac’s research shows that since 1914 the Dow has historically gained around 46‑50% on average from the midterm election year low to the following pre‑election year high.
That context added fuel to optimism as February opened. While uncertainties around tariffs and supply chains remain, price action now reflects renewed confidence.
Source: X
The Dow Jones enters the new month with momentum, stronger data, and rising expectations. How long can the rally run? Markets will soon find out.
