Dow Jones Stock Soars to New Highs—Why Analysts Say the Rally May Just Be Starting

New York—U.S. equities kicked off the week with a broad rally, led by the Dow Jones Industrial Average, after the White House confirmed a 90-day pause on proposed European Union tariff hikes to clear the way for fast-tracked trade talks. The DJIA jumped as much as 720 points, or roughly 1.7%, to an intraday high near 42,300, putting the blue-chip gauge back within striking distance of its late-April record close. Momentum was strongest across economically sensitive groups. Boeing, Caterpillar and 3M each rallied more than 3% as traders priced in a milder trade environment and firmer global demand. Retail bellwether Walmart gained 2% after the latest Conference Board survey showed U.S. consumer confidence at a five-month high, easing recession worries. Tech titans also re-entered the spotlight. Tesla soared 6% on brisk volume after announcing European price cuts that analysts said could protect market share without sacrificing margins, while Nvidia rose 4% ahead of Wednesday’s highly anticipated earnings call. Apple and Microsoft added more than 1% apiece, helping the Nasdaq Composite outperform with a 2% advance. Treasury yields slipped as investors rotated back into equities and weighed the possibility that a softer inflation trend could give the Federal Reserve room to begin trimming rates before year-end. The benchmark 10-year yield fell three basis points to 4.31%, a move that buoyed interest-rate-sensitive utilities and real-estate shares. Wall Street strategists said the combination of tariff relief, resilient consumer spending and cooling price pressures presents a “goldilocks” window for stocks. “If the EU negotiations stick and inflation continues to decelerate, the Dow could challenge 43,000 before the July Fed meeting,” wrote Morgan Stanley’s equity desk in a note to clients. Key levels to watch: near-term resistance sits at 42,400—last month’s intraday peak—followed by 43,000 psychological resistance. Support remains clustered around the 50-day moving average near 41,300; a break below that zone could trigger program-selling into the 40,800 area. Looking ahead, traders will parse durable-goods orders on Wednesday and the Fed’s preferred PCE inflation gauge on Friday. Stronger-than-expected macro data could extend the risk-on mood, while upside inflation surprises may rekindle rate-hike fears. For now, though, tailwinds from trade détente and upbeat earnings guidance are powering the Dow Jones stock rally and keeping bulls firmly in control of the summer tape.