Dow Jones futures rose by 0.29%, reaching about 49,400, during Thursday’s European session. Meanwhile, S&P 500 and Nasdaq 100 futures climbed by 0.49% and 0.74%, respectively. This increase followed a reduction in tensions between the US and Europe. President Donald Trump chose not to impose tariffs on European goods after a dispute over Greenland. He referenced a possible deal regarding Greenland with NATO but didn’t provide details.

US Session Market Movements

In the US session, the Dow Jones gained 1.21%, the S&P 500 rose 1.16%, and the Nasdaq 100 increased by 1.18%. Traders are paying close attention to upcoming US economic data, including Initial Jobless Claims and GDP figures, to guide their decisions. The Dow Jones Industrial Average includes 30 major US stocks. It is price-weighted, meaning the total stock prices are divided by a fixed number, currently set at 0.152. Several factors influence the Dow Jones Industrial Average, such as quarterly earnings of its member companies and global economic data. Interest rates and inflation metrics also significantly affect the index. Dow Theory, created by Charles Dow, aims to identify market trends based on the directions of the Dow Jones averages and their trading volumes. Traders can use various strategies for the DJIA, such as ETFs, futures, options, and mutual funds.

Short-Term Bullishness in Equity Markets

With US-EU tensions easing over the Greenland issue, we see signs of short-term bullishness in the equity markets. Dow futures moving toward 49,400 reflect a growing appetite for risk. This relief rally offers a chance for traders who had been hesitant due to recent geopolitical tensions. We’re considering call options on major indices like the S&P 500 because implied volatility is expected to drop from its recent highs. The CBOE Volatility Index (VIX), which surged above 20 during last week’s tariff threats, should return to its late 2025 average of about 16. This situation makes buying options cheaper and selling cash-secured puts for premium collection more appealing. However, this excitement must be moderated as we approach the upcoming US economic data releases. Initial jobless claims have remained low, hovering around 215,000 through late 2025, which indicates a tight labor market. The key number to watch will be the PCE inflation data, as December 2025’s reading of 2.8% keeps pressure on the Federal Reserve. In the coming weeks, the main strategy will be to trade the volatility driven by political headlines instead of taking a single direction. Historical reactions to similar trade disputes in 2025 show that these de-escalations can reverse quickly with just one comment. Thus, using straddles or strangles may be a wise way to navigate potential sharp market movements if the framework for a deal collapses. Create your live VT Markets account and start trading now.

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