US Consumer Sentiment in Focus
US futures were under pressure during the Asian session on February 6. The Dow Jones E-mini dropped 39 points, while the Nasdaq 100 E-mini and the S&P 500 E-mini declined 104 points and 14 points, respectively.
Later on Friday, the University of Michigan’s Surveys of Consumers will influence market sentiment. Economists expect the Michigan Consumer Sentiment Index to drop from 56.4 in January to 55.0 in February. A lower reading would signal a pullback in consumer spending, adversely impacting the US economy. For context, private consumption accounts for around 65% of US GDP.
Market sensitivity to today’s data will likely be heightened following the weaker-than-expected overnight US labor market data, which sent risk assets such as XRP sharply lower overnight.
AI-related spending concerns and weak US economic data sent US stock futures lower overnight, supporting a bearish short-term outlook. Nevertheless, expectations of an H1 2026 Fed rate cut affirm the bullish medium-term outlook.
According to the CME FedWatch Tool, the chances of a June Fed rate cut jumped from 57.5% on February 4 to 77.1% on February 5. Given the shifting sentiment toward the Fed rate path, traders should closely monitor FOMC members’ speeches. Rising support for a Fed rate cut would lift sentiment.
Key Technical Levels for Dow Jones, Nasdaq 100, and S&P 500
This week’s pullback left the Nasdaq 100 E-mini and the S&P 500 E-mini trading well below their 50-day EMAs, while holding above their 200-day EMAs. The EMA positions indicated a bearish near-term, but bullish longer-term outlook. Meanwhile, the Dow Jones E-mini held above its 50-day and 200-day EMAs, signaling a bullish bias, aligning with positive fundamentals.
Near-term trends will hinge on geopolitical risks, earnings, US economic data, and central bank chatter. Key levels to monitor include:
Dow Jones
- Resistance: 49,000, 49,500, and then the January 13 record high of 49,901.
- Support: the 50-day EMA (48,719), and then 48,500.